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BPMC meeting March 17, 2017
BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska March 17,2017 A 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:01 a.m. 2.ROLL CALL FOR COMMITTEE MEMBERS Cory Borgeson (Golden Valley Electric Association [GVEA]);Michael Lamb (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [ML&P]);and Brad Janorschke (Homer Electric Association [HEA]). 3.PUBLIC ROLL CALL Bryan Carey,Jocelyn Garner,Daniel Hertrich,Kirk Warren,Teri Webster (AEA);Brian Bjorkquist (Attorney General's Office);Crystal Enkvist (Alaska Power Association);Bob Day, Larry Jorgensen (HEA),Emily Hutchinson and Alan Owens (HEA-phone);Burke Wick (CEA - phone);Ron Wolfe (GVEA -phone);Gary Kuhn (MEA);Molly Morrison (MLP);Bernie Smith (Regulatory Commission of Alaska [RCA])and Jay Layne (phone-RCA);Sydney Hamilton (Accu-Type Depositions) 4.PUBLIC COMMENTS None. 5.AGENDA APPROVAL MOTION:Mr.Lamb made a motion to approve the agenda.Motion seconded by Mr. Janorschke. Chair Borgeson requested to amend the agenda adding Battle Creek Update after Item 7C. Battle Creek Project Financing.There were no objections. Mr.Thibert requested postponing Item 7D.O&M Operator Procurement to the next meeting.He commented the managers have briefly discussed this item and believes more discussion is necessary before it can be fully addressed. MOTION:Mr.Thibert made a motion to amend the agenda postponing Item 7D.O&M Operator Procurement to the next meeting and removing it from the agenda.Motion seconded by Mr.Izzo. Mr.Lamb requested leaving Item 7D.on the agenda as part of the record and having a short discussion regarding the memo he sent to Board members.The item can also be placed on the agenda for the next meeting to fulfill Mr.Thibert's request. BPMC Minutes 3/17/17 Page |of 4 The agenda was approved as amended,with Mr.Lamb and Mr.Janorschke voting against. 6.APPROVAL OF PRIOR MINUTES -February 17,2017 MOTION:Mr.Thibert made a motion to approve the minutes of February 17,2017. Motion seconded by Mr.1zzo. Mr.|zzo cited the February 17,2017 minutes,page four,Item 7E.Bradley Project Organizational Chart,last paragraph,wherein Mr.Lamb stated the utilities benefitted.Mr.Izzo expressed his belief the benefit is to 75 percent of the population.Chair Borgeson believes the minutes accurately reflect Mr.Lamb's comments.Mr.Izzo agreed,and did not propose a change. The motion passed without objection. 7.OLD BUSINESS A.FY18 Bradley Budget Ms.Garner reviewed the changes to the budget since the previous meeting due to HEA request to upgrade the crews quarters,the kitchen,and to replace the high bay lighting in the plant.The increase is $103,000.The new HEA's capital project budget is $1,657,000. Mr.Janorschke commented the work on the budget by the O&D Committee and Finance Committee was thorough and greatly appreciated. Mr.Thibert expressed appreciation in receiving the D.Hittle and Associates'report from HEA reviewing the facilities and equipment.He inquired about the report.Mr.Day explained the proposed budget tries to balance the report projections with the current experiences and expenditures. Chair Borgeson commented the members have to pay for the budget expenditures in one year and expressed interest in spreading some of the projects out over a couple of years to reduce the budget by approximately $300,000 to $400,000. Mr.Janorschke believes it is unfair to ask HEA to make budget cuts.He believes budget cuts should be the responsibility of the Finance and O&D Committees.Mr.Warner reviewed the ©O&D Committee's support of the specific budget expenditures,but had no opinion as to the timing of the purchases.Mr.Wick noted Committee discussions regarding exposure from the failure of a piece of equipment could increase the cost of replacement and the Committee believes the budgeted expenses are warranted. Mr.lzzo inquired about the option of financing the SVC project to take pressure off the R&C Fund,providing rate stability for members.Mr.Lamb believes it is reasonable to pursue SVC project financing.Mr.Thibert commented the option of wrapping SVC financing with Battle Creek financing is still a possibility. MOTION:Mr.Janorschke made a motion to approve the FY18 Bradley Budget with direction to the Finance Committee to pursue long-term financing for the SVC project BPMC Minutes 3/17/17 Page 2 of 4 and the non-R&C capital projects that are included in this year's budget.Motion seconded by Mr.Lamb. Chair Borgeson commented on the budget expenditure for the engineering work on the spillway extension.He requested the BPMC receive a presentation on the final report at the next meeting. A roll call vote was taken,and the motion passed unanimously. B.Disposal of Bradley Assets Ms.Garner reviewed the process of the disposal of Bradley assets.The operator provides the assets to Fleet in Homer.Fleet posts the assets on the State auction website for sale.After the sale,the funds are provided to AEA.AEA returns the funds to the project and are provided as a refund at the end of the year. Cc.Battle Creek Project Financing Ms.Garner led the discussion regarding the spreadsheet of the two financing options for the Battle Creek Project created by AEA and reviewed by the Budget Subcommittee.The total estimated costs for the project is $46.7M.The deadline to have the financing in place is July 16, 2017 to prevent major cost increases.The financing rates appear to be increasing and a delay in the securing the financing will add significant cost to the project and therefore the cost of energy.A one percent increase in financing is nearly an increase of 10 percent cost of energy and about equal to a 10 percent increase in construction cost if the term of financing is 18 years. Battle Creek Update Mr.Carey shared and discussed a video using LiDAR of the Battle Creek project that was shown at a Battle Creek workshop earlier this week.Mr.Carey reviewed the updated materials on the Battle Creek permitting,critical path schedule,and costs. 8.COMMITTEE REPORTS Mr.Warner informed the O&D Committee has been working on operating procedures related to Bradley Lake,and will present at the next BPMC meeting. 9.OPERATOR REPORT Mr.Day submitted the Operator Report.They are currently doing annual maintenance work. The unit availability for the month of February was 100 percent. 10.COMMITTEE ASSIGNMENTS Chair Borgeson reviewed assignments.Kirk Gibson will provide a report on the Battle Creek financing if only a few utilities participate.The Finance Committee will research the SVC financing and look at longer-term financing for equipment for the FY18 budget.The O&D Committee will provide a presentation at the next meeting on the spillway improvement. 11.MEMBERS COMMENTS BPMC Minutes 3/17/17 Page 3 of 4 Mr.Lamb commented the mission of AEA to lower the cost of power is perpetual and energy projects have to be viewed from both short-term and long-term perspectives. Mr.Thibert expressed appreciation for the work of the Budget Committee and the Finance Committee. Chair Borgeson expressed appreciation to participants for their time and efforts. 12.NEXT MEETING DATE The next meeting date is April 18,2017. 13.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 10:32 a.m. »Ue RQnouCoryBorgeson,Chair wow MNMichaelLamb-Alaska Energy authority Secretary "BPMC Minutes 3/17/17 Page 4 of4 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Friday,March 17,2017 9 a.m. Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate,dial 1-888-585-9008 and use code 467 050 126. 1.CALL TO ORDER 2.ROLL CALL FOR COMMITTEE MEMBERS 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.AGENDA APPROVAL 6.APPROVAL OF PRIOR MINUTES -Feb 17,2017 7.OLD BUSINESS A.FY18 Bradley Budget Budget Committee B.Disposal of Bradley Assets AEA C.Battle Creek project financing AEA D.O&M Operator procurement AEA 8.COMMITTEE REPORTS 9.OPERATOR REPORT 10.COMMITTEE ASSIGNMENTS 11.MEMBERS COMMENTS 12.NEXT MEETING DATE -April 18,2017 13.ADJOURNMENT BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING DRAFT REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska February 17,2017 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:46 a.m. 2.ROLL CALL FOR COMMITTEE MEMBERS Cory Borgeson (Golden Valley Electric Association [GVEA]);Michael Lamb (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [MLP]);Brad Janorschke (Homer Electric Association [HEA]);and John Foutz (Seward). 3.PUBLIC ROLL CALL ae t Bryan Carey,Katie Conway;Jocelyn Garner,Jennifer Haldane,Valerie Leavitt,David Lockard, Kelli Veech,Kirk Warren,Teri Webster,Brandi White (AEA);Brian Bjorkquist (Attorney General's Office [AGO]);Crystal Enkvist (Alaska Power Association [APA]);Brian Hickey,Mark Johnson,Russ Thornton,Burke Wick (CEA);Bob Day,Emily Hutchinson (phone),Larry Jorgensen,Alan Owens (HEA);Kirk Gibson (Mcdowell Rackner Gibson PC);Jim Brooks,Gary Kuhn,David Pease (MEA);Anthony Scott (MLP);Jay Layne (phone),Bernie Smith (Regulatory Commission of Alaska [RCA]);Sydney Hamilton (Accu-Type Depositions);and TW Patch (Public).me 4.PUBLIC COMMENTS None. 5.AGENDA APPROVAL MOTION:Mr.Johnston made a motion to approve the agenda.Motion seconded by Mr. Izzo. Mr.Lamb requested to amend the agenda adding Item 7D.Bradley O&M Procurement Update and Item 7E.Bradley Project Organizational Chart The agenda was approved as amended. 6.APPROVAL OF PRIOR MINUTES -December 14,2016 MOTION:Mr.Foutz made a motion to approve the minutes of December 14,2016. Motion seconded by Mr.Janorschke. The motion passed without objection. 7.NEW BUSINESS A.Battle Creek Project Update DRAFT BPMC Minutes 2/17/17 Page 1 of 5 Mr.Carey reviewed the Battle Creek Project update data sheet provided to members.The permitted water rights for the project were received from Department of Natural Resources (DNR).Revised information for the land lease were submitted to DNR and is expected to be prioritized before the brush is cleared in July.The Federal Energy Regulatory Commission (FERC)Fish Plan sent out three weeks ago has received comments from Fish and Game,and will be used as a template for future licensees. Mr.Carey noted the schedule is currently on track and will only be delayed if the financing and agreements do not move forward as anticipated.The timeline includes the initial request for proposal (RFP)in late June,site visit for contractor and clearing in August,bids received in late fall,road construction in 2018,pipe and dam installation in 2019,and the diversion beginning in 2020.Mr.Carey stated the finalized 95%cost estimate came in less than the previous estimate and is approximately $46.7 million. Mr.Thibert asked Mr.Gibson if a majority of the members is required to approve financing.Mr. Gibson noted he will research the alternatives and provide the answer at a later date.Chair Borgeson requested more information from Mr.Gibson and AEA regarding the specifics of the Battle Creek Project if only two members wanted to participate.Mr.Lamb stated that if even one utility was willing to do the project and pay the rates and have AEA finance it,AEA would not be able to go to the market to finance it due to the March 2016 letter. Mr.Lamb discussed the letter to AEA from CEA,GVEA,and MEA in March of 2016,which asserts if there was not a path for the electricity to come forward there would be a legal challenge of the obligation to pay the debt under the Power Sales Agreement (PSA).This letter puts the financial security of the asset at risk.AEA's bond counsel has communicated to the three utilities'attorneys AEA would not be able to go out to the market for Battle Creek bond financing until the security issue raised in the letter for repaying the debt has been resolved in writing.Mr.Thibert thought the issue was resolved but Chair Borgeson stated they did not retract that position.GVEA has concerns contributing to an AEA-owned asset and Battle Creek is part of it.Mr.Lamb requested the PSA enforceability issue related to the bond be resolved and the utility participation in Battle Creek be resolved. Chair Borgeson noted there is not complete alignment of the utilities going forward with the Battle Creek Project.At the previous meeting,one member utility stated they would not participate in the diversion and they did not contribute to the $800,000 engineering construction drafts but they can join the project prior to financing discussions.Chair Borgeson tasked Mr.Gibson to review theissues and place it on the agenda for the next meeting.Chair Borgeson stated the March 2016 letter and responses will be provided to allmembers. MOTION:Mr.Janorschke made a motion requesting AEA,with support from the Finance Committee,to provide Battle Creek Project financing models within 30 days that assume the security issues are resolved.Motion seconded by Mr.Johnston. The motion passed,with Mr.Johnston abstaining. Mr.Johnston stated MLP expressed an interest not to participate in the Battle Creek Project. B.National Hydroelectric Association Membership Mr.Carey stated AEA belonged to the NHA using Susitna-Watana Hydro funds but that is no longer available.He requested the membership of $10,000 be renewed through the BPMC.All DRAFT BPMC Minutes 2/17/17 Page 2 of 5 Bradley utilities and AEA would receive membership benefits.Mr.Carey noted this is not a current budget line item and recommended the decision be made by motion. MOTION:A motion was made to approve an expenditure of $10,000 for AEA's NHA membership,as outlined in Mr.Carey's January 6,2017 memo.Motion seconded by Mr. Janorschke. A roll call vote was taken,and the motion passed unanimously. C.Draft FY18 Bradley Budget Ms.Garner informed members have until April 1st to amend and approve the draft FY18 Bradley Budget.Any amendments are to be brought to Ms.Garner and the finalized budget will come before the full Committee for approval at the next meeting.Ms.Garner highlighted the summary budget changes from last year.Mr.Day noted he is nearly full-time as the Bradley Project Manager.Mr.Owens is the Power Production Manager.Mr.Jorgensen is the Director of Power.Mr.Day explained the construction year spans the summer and the fiscal year splits the summer.He reviewed the short-term capital projects that were approved,funded and began during this year's budget,but will not be completed until next fiscal year.Approximately$600,000 of the budgeted amount will be refunded to the members with the request for carry- over into the FY18 budget for completion of the short-term projects. Chair Borgeson asked if the budget includes an expense item for reclamation of the project after the life of the dam.Mr.Carey is not aware of any reclamation funding and a reclamation requirement is not a typical practice for FERC projects.Mr.Carey noted the expected life of the dam is 500-plus years.The State has no obligation to restore the lake to its original condition under the FERC license.oe Chair Borgeson inquired if the spillway work is considered project work.Mr.Thibert and Mr. Janorschke stated the spillway work is project work. D.Bradley O&M Procurement Update Mr.Lamb requested input from the members regarding opening the RFP process to others beyond the current qualified responders.In a previous conversation,Mr.Borgeson expressed wanting to open the RFP procurement to include more utilities to reach the most cost effective option.Regulations restrict the pool of qualified utilities as an operator.It states the two options for the project operator are either an AEA employees or a qualified utility.A qualified utility is defined as a certified utility in the market area of the project so that would include the Railbelt. The statutes are less restrictive and allows flexibility on the operator.Mr.Lamb stated the regulation language can be changed to broaden the definition of qualified utility if that is what the BPMC would like. Chair Borgeson requested information on the difficulty and length of time to broaden the scope of the regulations.Mr.Bjorkquist believes the adoption process takes approximately 90 days. MOTION:Mr.Lamb made a motion to modify the regulations such that the largest number of qualified responders are permitted for the O&M procurement RFP.Motion seconded by Mr.Johnston. Mr.1zzo noted the challenge with the motion is the definition of the use of the word qualified. Mr.Thibert requested more time to review the issue and the motion.Mr.Johnston asked for an update on the RFP timeframe.Mr.Lamb stated the timeframe is two years,minus the month- and-a-half that has already passed.The decision was made at the previous meeting the RFP will provide an all-inclusive scope describing the criteria of a qualified responder. DRAFT BPMC Minutes 2/17/17 Page 3 of 5 MOTION:Mr.Thibert made a motion to table the motion to modify the regulations until the March 2017 meeting.Motion seconded by Mr.Johnston. The motion to table passed unanimously. The motion to modify the regulations was tabled until the March 2017 meeting. Chair Borgeson requested an update on the envisioned process of excluding a utility,who will participate in the RFP,from the evaluation committee.Mr.Lamb explained an inquiry will be sent to the utilities regarding participation in the RFP.Any utility that is interested in responding to the RFP will not participate in the scoping development process.Any utility that will not respond to the RFP will participate in the scoping development process.If all utilities are interestedin responding to the RFP,AEA will develop the Scope with the assistance of outsideknowledgeableandqualifiedpersons." E.Bradley Project Organizational Chart.Chair Borgeson reported the Bradley Project Organizational Chart.was erroneously sent from his office to all members.He apologized for the error.It was meant to go to the Railbeltmanagers. Mr.Lamb requested more information regarding the chart and its intent.Chair Borgeson stated he has nothing further to add and the chart was sent to Mr.Lamb in error.Mr.Lamb commented Bradley is an AEA-owned public asset and the organizational chart related to Bradley does not include the owner.Mr.Lamb asked the member utilities present at themeetingtocomment.No utility responded. Chair Borgeson expressed this is a year of unity for the Railbelt with positive ways going forward to provide low-cost energy to members.As they look at strategic planning,they are looking at a lot of models and options for the Railbelt utilities. Mr.Lamb asked if Bradley Lake,an State public owned asset,is an option.Mr.Borgeson stated he had nothing further to add.Mr.Thibert reported he had not seen the chart before it was accidentally sent out to all members.He noted strategic discussions have occurred regarding options because the State has been reviewing the agencies of AEA,AHFC,and AIDEA. Mr.Lamb stated the utilities benefited when the State helped build Bradley and paid for half of with it $165M of cash.The State helped build the Intertie and works to support the Railbelt group regarding Battle Creek to support low cost energy.He convened his disappointment and will discuss this with the AEA Board regarding the utilities'lack of transparency and lack of willingness to discuss the organizational chart. 8.COMMITTEE REPORTS The OMB Committee met and the primary focus was the budget,which was forwarded to the Budget Committee. Ms.Garner informed the expense report through December is included in the member packets. There were no questions. DRAFT BPMC Minutes 2/17/17 Page 4 of 5 9.OPERATOR REPORT Mr.Day submitted the Operator Report.There were no questions. 10.COMMITTEE ASSIGNMENTS Chair Borgeson reviewed assignments.Mr.Gibson will review alternative scenarios,including legal issues,for the Battle Creek Project with respect to less than 100%of Bradley member utilities participating.The Finance Committee will provide information to the utilities on the financing costs and models of the Battle Creek Project.Mr.Gibson will review the March 2016 letter and provide the letter and responses to all member utilities. 11.MEMBERS COMMENTS Mr.Izzo requested a future update on the Boston Consulting Group (BCG),AO 281,and the recommendation regarding the merger of AEA and AHFC,specifically concerning the AEA- owned assets,Intertie and Bradley Project.Mr.Lamb stated there is legislative intent outside of AO 281 which had multiple scope questions that have to do with the colocation of agencies and not the merging of agencies.Mr.Lamb is not aware the Administration has taken a position on the recommendations of BCG. Mr.Foutz expressed appreciation to Mr.Day and staff for tightening their operating budget. Mr.Lamb commented the receipt of the organizational chart causes concern for AEA.The lack of transparent discussion is disconcerting.Mr.Lamb expressed his guard is up and he is wary. Mr.Thibert responded the outcomes of the studies by the Administration could have an impact on members'operations and the ability of AEA to continue its current functions.He believes the utilities are reviewing ways to protect themselves. Chair Borgeson expressed appreciation to Ms.Webster for her extraordinary efforts.He expressed his confidence in Mr.Day and thanked him for returning to the Bradley project.He expressed appreciation for those in attendance for their work. 12.©NEXT MEETING DATE -TBD The next meeting date is March 17,2017. 13.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 11:51 a.m. BY: Cory Borgeson,Chair Attest: Michael Lamb Alaska Energy Authority,Secretary DRAFT BPMC Minutes 2/17/17 Page 5 of5 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING DRAFT REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska February 17,2017 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:46 a.m. 2.ROLL CALL FOR COMMITTEE MEMBERS a 'yCoryBorgeson(Golden Valley Electric Association [GVEA]);Michael Lamb (Alaska EnergyAuthority[AEA]);Lee Thibert (Chugach Electric Associati6n [CEA]);Tony Izzo (MatanuskaElectricAssociation[MEA]);Mark Johnston (Anchoragé Municipal Light &Power [MLP]);BradJanorschke(Homer Electric Association [HEA]);and John Fou (Seward). 3.PUBLIC ROLL CALL a raBryanCarey,Katie Conway;Jocelyn Garner,Jennifer Haldane,Valerie Leavitt,David Lockard,Kelli Veech,Kirk Warren,Teri Webster,Brandi White (AEA)?Brian Bjorkquist (AttorneyGeneral's Office [AGO]);Crystal Enkvist (Alaska Power Association [APA]);Brian Hickey,MarkJohnson,Russ Thornton,Burke Wick (CEA);Bob Day,'Emily Hutchinson (phone),LarryJorgensen,Alan Owens (HEA);Kirk Gibson (Mcdowell Rackner Gibson PC);Jim Brooks,GaryKuhn,David Pease (MEA);Anthony Scott (MLP);Jay Layne (phone),Bernie Smith (RegulatoryCommissionofAlaska[RCA]);Sydney Hamilton (Accu-Type Depositions);and TW Patch(Public).Ne 4.PUBLIC COMMENTS None. 5,AGENDA APPROVAL MOTION:Mr.Johnston made a motion to approve the agenda.Motion seconded by Mr. Izzo. Mr.Lamb requested to amend the agenda adding Item 7D.Bradley O&M Procurement Update and Item 7E.Bradley Project Organizational Chart The agenda was approved as amended. 6.APPROVAL OF PRIOR MINUTES -December 14,2016 MOTION:Mr.Foutz made a motion to approve the minutes of December 14,2016. Motion seconded by Mr.Janorschke. The motion passed without objection. 7.NEW BUSINESS A.Battle Creek Project Update DRAFT BPMC Minutes 2/17/17 Page 1 of 5 Mr.Carey reviewed the Battle Creek Project update data sheet provided to members.The permitted water rights for the project were received from Department of Natural Resources (DNR).Revised information for the land lease were submitted to DNR and is expected to be prioritized before the brush is cleared in July.The Federal Energy Regulatory Commission (FERC)Fish Plan sent out three weeks ago has received comments from Fish and Game,and will be used as a template for future licensees. Mr.Carey noted the schedule is currently on track and will only be delayed if the financing and agreements do not move forward as anticipated.The timeline includes the initial request for proposal (RFP)in late June,site visit for contractor and clearing in August,bids received in late fall,road construction in 2018,pipe and dam installation in 2019,and the diversion beginning in 2020.Mr.Carey stated the finalized 95%cost estimate came in less than the previous estimate and is approximately $46.7 million. Mr.Thibert asked Mr.Gibson if a majority of the members is required to approve financing.Mr. Gibson noted he will research the alternatives and provide the answer at a later date.Chair Borgeson requested more information from Mr.Gibson and AEA regarding the specifics of the Battle Creek Project if only two members wanted to participate.Mr.Lamb stated that if evenoneutilitywaswillingtodotheprojectandpaytheratesandhaveAEAfinanceit,AEA would not be able to go to the market to finance it due to the March 2016 letter. Mr.Lamb discussed the letter to AEA from CEA,GVEA,and MEA in March of 2016,which asserts if there was not a path for thé electricity to come forward there would be a legalchallengeoftheobligationtopaythe,debt under the Power Sales Agreement (PSA).This letterputsthefinancialsecurityoftheassetatTisk,AEA's bond counsel has communicated to thethreeutilities'attorneys AEA would not he able to.go out to the market for Battle Creek bondfinancinguntilthesecurityissueraisedintheletterforrepayingthedebthasbeenresolvedinwriting.Mr.Thibert thought theissue was resolved but Chair Borgeson stated they did notretractthatposition.GVEA has concerns contributing to an AEA-owned asset and Battle Creekispartofit.Mr.Lamb requested the PSA enforceabilityissue related to the bond be resolvedandtheutility/participation ininBattle Creek be resolved.Chair Borgéson noted there'is,is,not cofnpleté alignment of the utilities going forward with theBattle(reek Project. At the previous meeting,one member utility stated they would notparticipateinthediversionandtheydidnotcontributetothe$800,000 engineering constructiondraftsbuttheycanjointheprojectpreciofinancingdiscussions.Chair Borgeson tasked Mr.Gibson to review theissues and place it on the agenda for the nextmeeting.Chair Borgeson stated the March 2016 letter and responses will be provided to allmembers.KO AeNo4.MOTION:Mr.Janorschke made a motion requesting AEA,with support from the Finance Committee,to provide Battle Creek Project financing models within 30 days that assume the security issues are resolved.Motion seconded by Mr.Johnston. The motion passed,with Mr.Johnston abstaining. Mr.Johnston stated MLP expressed an interest not to participate in the Battle Creek Project. B.National Hydroelectric Association Membership Mr.Carey stated AEA belonged to the NHA using Susitna-Watana Hydro funds but that is no longer available.He requested the membership of $10,000 be renewed through the BPMC.All DRAFT BPMC Minutes 2/17/17 Page 2 of 5 Bradley utilities and AEA would receive membership benefits.Mr.Carey noted this is not a current budget line item and recommended the decision be made by motion. MOTION:A motion was made to approve an expenditure of $10,000 for AEA's NHA membership,as outlined in Mr.Carey's January 6,2017 memo.Motion seconded by Mr. Janorschke. Aroll call vote was taken,and the motion passed unanimously. Cc.Draft FY18 Bradley Budget Ms.Garner informed members have until April 1st to amend and approve the draft FY18BradleyBudget.Any amendments are to be brought to Ms.Garner and the finalized budget willcomebeforethefullCommitteeforapprovalatthenextmeeting.'Ms.Garner highlighted thesummarybudgetchangesfromlastyear.Mr.Day noted feis nearly full-time as the BradleyProjectManager.Mr.Owensis the Power Production Manager.Mr.Jorgensen is the DirectorofPower.Mr.Day explained the construction yearspans the summer and the fiscal year splitsthesummer.He reviewed the short-term capital projects that were approved,funded andbeganduringthisyear's budget,but will not be Completed until next fiscal year.Approximately$600,000 of the budgeted amount will be refunded to the members with the request for carry-over into the FY18 budget for completion of the short-term projects.N, -Chair Borgeson asked if the budget includes an expense item for reclamation 'of the project afterthelifeofthedam.Mr.Careyis not aware of any reclamation funding and a reclamationrequirementisnotatypicalpracticeforFERCprojects.Mr,Carey noted the expected life of thedamis500-plus years.The State has no obligation to restore,the lake to its original conditionundertheFERClicense."M : - Chair Borgeson inquired if the spillway work is considered project work.Mr.Thibert and Mr. Janorschke stated the spillway work is project work. D.Bradley O&M Procurement Update Mr.Lamb requested input from the members regarding opening the RFP process to others beyond the current qualified responders.In a previous conversation,Mr.Borgeson expressed wanting to open the RFP procurement to include more utilities to reach the most cost effective option.Regulations restrict the poo!of qualified utilities as an operator.It states the two options for the project operator are either an AEA employees or a qualified utility.A qualified utility is defined as a certified utility in the market area of the project so that would include the Railbelt. The statutes are less restrictive and allows flexibility on the operator.Mr.Lamb stated the regulation language can be changed to broaden the definition of qualified utility if that is what the BPMC would like. Chair Borgeson requested information on the difficulty and length of time to broaden the scope of the regulations.Mr.Bjorkquist believes the adoption process takes approximately 90 days. MOTION:Mr.Lamb made a motion to modify the regulations such that the largest number of qualified responders are permitted for the O&M procurement RFP.Motion seconded by Mr.Johnston. Mr.1zzo noted the challenge with the motion is the definition of the use of the word qualified. Mr.Thibert requested more time to review the issue and the motion.Mr.Johnston asked for an update on the RFP timeframe.Mr.Lamb stated the timeframe is two years,minus the month- and-a-half that has already passed.The decision was made at the previous meeting the RFP will provide an all-inclusive scope describing the criteria of a qualified responder. DRAFT BPMC Minutes 2/17/17 Page 3 of 5 MOTION:Mr.Thibert made a motion to table the motion to modify the regulations until the March 2017 meeting.Motion seconded by Mr.Johnston. The motion to table passed unanimously. The motion to modify the regulations was tabled until the March 2017 meeting. Chair Borgeson requested an update on the envisioned process of excluding a utility,who will participate in the RFP,from the evaluation committee.Mr.Lamb explained an inquiry will be sent to the utilities regarding participation in the RFP.Any utility that is interested in responding to the RFP will not participate in the scoping development process.Any utility that will notrespondtotheRFPwillparticipateinthescopingdevelopmentprocess.If all utilities areinterestedinrespondingtotheRFP,AEA will develop the scope with the assistance of outsideknowledgeableandqualifiedpersons.: é.E.Bradley Project Organizational Chart "Chair Borgeson reported the Bradley Project Ofganizational Chart was.5 erroneously sent fromhisofficetoallmembers.He apologized for the error.It was meant to go to the Railbelt managers.NO a po,So 7 fo aMr.Lamb requested more information regarding the chart and its intent.Chair Borgeson statedhehasnothingfurthertoaddandthechartwassenttoMr.Lambin error.Mr.LambcommentedBradleyisanAEA-owned public asset and the.organizational chart related toBradleydoesnotincludetheowner.Mr.Lamb asked the member utilities present at the meeting to comment.No utility responded.. %.Ms Ne a Chair Borgeson expressed this is a year of unity for the Railbelt with positive ways going forward to provide low-cost energy to members.As they look at strategic planning,they are looking at a lot of models and options for the Railbelt utilities. Mr.Lamb asked if Bradley Lake,an State public owned asset,is an option.Mr.Borgeson statedhenaehothingfurthertoadd.Mr.Thibert reported he had not seen the chart before it was accidentally sent out to allmembers.He noted strategic «discussions have occurred regarding options because the StatehasbeenrewenngtheagenciesofAEA,AHFC,and AIDEA.\Mr.Lamb stated the utilities benefited when the State helped build Bradley and paid for half ofwithit$165M of cash*'The State helped build the Intertie and works to support the Railbelt group regarding Battle Creek to support low cost energy.He convened his disappointment and will discuss this with the AEA Board regarding the utilities'lack of transparency and lack of willingness to discuss the organizational chart. 8.COMMITTEE REPORTS The OMB Committee met and the primary focus was the budget,which was forwarded to the Budget Committee. Ms.Garner informed the expense report through December is included in the member packets. There were no questions. DRAFT BPMC Minutes 2/17/17 Page 4 of 5 9.OPERATOR REPORT Mr.Day submitted the Operator Report.There were no questions. 10.COMMITTEE ASSIGNMENTS Chair Borgeson reviewed assignments.Mr.Gibson will review alternative scenarios,including legal issues,for the Battle Creek Project with respect to less than 100%of Bradley member utilities participating.The Finance Committee will provide information to the utilities on the financing costs and models of the Battle Creek Project.Mr.Gibson will review the March 2016 letter and provide the letter and responses to all member utilities. 11.MEMBERS COMMENTS Mr.Izzo requested a future update on the Boston Consulting Group (BCG),AO 281,and the recommendation regarding the merger of AEA and AHFC,specifically concerning the AEA- owned assets,Intertie and Bradley Project.Mr.Lamb stated there is legislative intent outside of AO 281 which had multiple scope questions that have to do with the colocation of agencies and not the merging of agencies.Mr.Lamb is not aware the Administration has taken a position on the recommendations of BCG. Mr.Foutz expressed appreciation tohMr.Day and staff for tightening their operating budget.Mr.Lamb commented the receipt ofthe organizational chart causes concern for AEA.The lackoftransparentdiscussionisdisconcerting-Mr.Lamb expressed his guardis up and he is wary.Mr.Thibert responded the outcomes ofwhe studies by the Administration could have an impactonmembers'operations and the ability of AEA to continue its current functions.He believes theutilitiesarereviewing'ways to Protect themselves"meNONetChairBorgesonexpressedappreciationtoMs.Webster for her extraordinary efforts.HeexpressedhisconfidenceinMr..Day and thanked him for returning to the Bradley project.Heexpressedappreciationforthoseiinattendancefortheirwork.ee "s12.c NEXT MEETING PATE --TBD_seThenextmeetingdateisMarch17,De13.ADJOURNMENT |NO FTherebeingnofurtherbusiness for the committee,the meeting adjourned at 11:51 a.m. *, WF" BY: Cory Borgeson,Chair Attest: Michael Lamb Alaska Energy Authority,Secretary DRAFT BPMC Minutes 2/17/17 Page 5 of 5 Bradley Lake Operations &Maintenance Budget Entry Page -Payroll FY 2018 Budget Dept rere ie Teaere Lap Summary budget comparison to prior year -HEA Payroll %change FY2016 FY2017 FY2018 FY17 to FY18 1,891,369.68 1,874,665.79 -1,766,090.75 -5.8% Decrease due to more refined ST Rate and ST Hours,transition in personnel CR HELOotnore ENT a Obi Rate =Obi Hours |Tota!CosPayrolley:ST Hours & HEA [535 -Operation Supervision &Eng.HEA O&M Contract Director of Power 159.00 222.00 $35,298.00 HEA {535 -Operation Supervision &Eng.HEA O&M Contract Power Production Manager 155.00 444.00 $68,820.00 HEA [535 -Operation Supervision &Eng.HEA O&M Contract Bradley Project Manager 164.76 888.00 100.00 75.00 $153,806.88 HEA {535 -Operation Supervision &Eng.HEA O&M Contract Engineering as needed 127.70 60.00 $7,662.00 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Director of Power 159.00 222.00 $35,298.00 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Power Production Manager 155.00 444.00 $68,820.00 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Bradley Project Manger 164.76 888.00 100.00 75.00 $153,806.88 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Engineering as needed 122,18 120.00 $14,661.60 HEA [537 -Hydraulic Expenses HEA O&M Contract Plant Foreman Crew 1 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA [537 -Hydraulic Expenses HEA O&M Contract Plant Foreman Crew 2 90.43 177.00 91.36 10.00 118.00 25.00 15 19,869.71 HEA [537 -Hydraulic Expenses HEA O&M Contract Plant Rover Crew 1 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA {537 -Hydraulic Expenses HEA O&M Contract Plant Rover Crew 2 83.31 177.00 82.79 10.00 106.57 25.00 1S 18,238.02 HEA {537 -Hydraulic Expenses HEA O&M Contract Plant Rover Trainee 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA |538 -Electric Expenses HEA O&M Contract Plant Foreman Crew 1 +on call 90.43 340.00 91.36 10.00 118.00 172.00 |$51,955.80 HEA |538 -Electric Expenses HEA O&M Contract Plant Foreman Crew 2 +on calt 90.43 340.00 91.36 10.00 118.00 172.00 |$51,955.80 HEA |538 -Electric Expenses HEA O&M Contract Plant Rover Crew 1 +on call 83.31 340.00 82.79 10.00 106.S7 172.00 |$47,483.34 HEA |538 -Electric Expenses HEA O&M Contract Plant Rover Crew 2 +on call 83.31 340.00 82.79 10.00 106.57 172.00}$47,483.34 HEA |538 -Electric Expenses HEA O&M Contract Plant Rover Trainee 83.31 340.00 82.79 10.00 106.57 40.00 |$33,416.10 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Foreman Crew 1 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Foreman Crew 2 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Rover Crew 1 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA |539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Rover Crew 2 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA }539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Rover Trainee 83.31 177.00 82.79 10.00 106.57 25.00]$18,238.02 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Procurement &Accounting as needed 64.46 900.00 $58,014.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Clerical,Env.,Safety as needed 90.21 300.00 $27,063.00 HEA [542 -Maintenance of Structures HEA O&M Contract Plant Foreman Crew 1 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA {542 -Maintenance of Structures HEA O&M Contract Plant Foreman Crew 2 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA |542 -Maintenance of Structures HEA O&M Contract Plant Rover Crew 1 83.31 177.00 82.79 10.00 106.57 25.00 |S 18,238.02 HEA |542 -Maintenance of Structures HEA O&M Contract Plant Rover Crew 2 83.31 177.00 82.79 10.00 106.57 25.00}$18,238.02 HEA |542 -Maintenance of Structures HEA O&M Contract Plant Rover Trainee 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract Plant Foreman Crew 1 +helicopter 90.43 100.00 91.36 2.00 118.00 12.00}$10,641.72 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract Plant Foreman Crew 2 +helicopter 90.43 100.00 91.36 2.00 118.00 12.00 |$10,641.72 HEA {543 -Maintenance of Res.,Dams HEA O&M Contract Plant Rover Crew 1 +helicopter 83.31 100.00 82.79 2.00 106.57 12.00 }$9,775.42 HEA [543 -Maintenance of Res.,Dams HEA O&M Contract Plant Rover Crew 2 +helicopter 83.31 100.00 82.79 2.00 106.57 12.00 |$9,775.42 HEA (543 -Maintenance of Res.,Dams HEA O&M Contract Ptant Rover Trainee +helicopter 83.31 100.00 82.79 2.00 106.57 12.00 |$9,775.42 HEA |544 -Maint of Electric Plant HEA O&M Contract Plant Foreman Crew 1 90.43 726.00 91.36 25.00 118.00 100.00 |$79,736.18 HEA 1544 -Maint of Electric Plant HEA O&M Contract Plant Foreman Crew 2 90.43 726.00 91.36 25.00 118.00 100.0015 79,736.18 HEA [544 -Maint of Electric Plant HEA O&M Contract Plant Rover Crew 1 83.31 726.00 82.79 25.00 106.57 100.00 |$73,209.81 HEA [544 -Maint of Electric Plant HEA O&M Contract Plant Rover Crew 2 83.31 726.00 82.79 25.00 106.57 100.00 |$73,209.81 HEA $544 -Maint of Electric Plant HEA O&M Contract Plant Rover Trainee 83.31 726.00 82.79 25.00 106.57 100.00 |$73,209.81 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Foreman Crew 1 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA Payroll Page 1 of 11 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Foreman Crew 2 90.43 177.00 91.36 10.00 118.00 25.00 |$19,869.71 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Rover Crew 1 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA 1545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Rover Crew 2 83.31 177.00 82.79 10.00 106.57 25.00 |$18,238.02 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Rover Trainee 83.31 177.00 82.79 10.00 106.57 25.001 $18,238.02 HEA [556 -System Control &Load Dispatching {HEA O&M Contract Engineering time as needed 93.72 220.00 $20,618.40 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Line Crew (General Maintenance/Patrol 93.74 500.00 95.25 -123.18 100.00 |$59,188.00 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (General Maintenance/Patrol)122.18 20.00 $2,443.60 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Line Crew (Row Clearing)93.74 95.25 123.18 $- HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Row Clearing)122.18 10.00 3 1,221.80 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 93.74 -95.25 123.18 >- HEA [5714 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Bradley/SOL RAS Scheme)122.18 80.00 $9,774.40 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 93.74 -95.25 123.18 $- HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Bradley 115 kV Breaker Sync)122.18 80.00 $9,774.40 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 93.74 :95.25 :123.18 -$: HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 122.18 :$: HEA $: $1,766,090.75 O&M (payroll)$1,683,688.55 transmission (payroll)$82,402.20 $1,766,090.75 HEA Payroll Page 2 of 11 Bradley Lake Operations &Maintenance Budget Entry Page -AP &Other FY 2018 Budget Summary budget comparison to prior year -HEA AP &Other %change FY2016 FY2017 FY2018 FY17 to FY18 1,264,017.00 1,334,488.00 938,215.00 -29.7% Decrease due to reduced budget for transmission line maintenance projects Dept}FERC 2S err AE OEE MAT PCT ea Activity eine eT Cost Type Sere Ten rSety Press AP Detail Description 2"Total Cost *”: HEA {535 -Operation Supervision &Eng.HEA O&M Contract 802010000 -Travel Commercial Travel $10,450.00 HEA 535 -Operation Supervision &Eng.HEA O&M Contract 802020000 -Training Technical Training $9,300.00 HEA {535 -Operation Supervision &Eng.HEA O&M Contract 803010000 -Contractual Office Equip.Maint.S 1,000.00 HEA {535 -Operation Supervision &Eng.HEA O&M Contract 804020000 -Supplies &Materials Small Items &Consumables $2,000.00 HEA |535 -Operation Supervision &Eng.HEA O&M Contract 804020000 -Supplies &Materials Document Control $2,000.00 HEA |537 -Hydraulic Expenses HEA O&M Contract 803010000 -Contractual Env.&Fish Game Studies $2,000.00 HEA {537 -Hydraulic Expenses HEA O&M Contract 804020000 -Supplies &Materials Supplies &Materials s 2,000.00 HEA |538 -Electric Expenses HEA O&M Contract 802010000 -Travel Travel and Per Diem S 7,000.00 HEA |538 -Electric Expenses HEA O&M Contract 802020000 -Training Technical Training $25,000.00 HEA [538 -Electric Expenses HEA O&M Contract 803010000 -Contractual Balancing &Vib Analysis $2,000.00 HEA {538 -Electric Expenses HEA O&M Contract 804020000 -Supplies &Materials Turbine Lube Oil $3,500.00 HEA [S38 -Electric Expenses HEA O&M Contract 804020000 -Supplies &Materials Consumables $6,232.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Housekeeping as needed $1,800.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Helicopter Transportation $40,000.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Fixed Wing Transportation $156,000.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Barge Shipping &Docking $25,000.00 HEA |539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual UPS/FedEx Shipping $1,200.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Disposal Costs $2,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Telephone &Satellite $13,025.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Software Support S 6,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Legal Services $2,500.00 HEA |539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Fuel $40,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 802020000 -Training Training Office and Safety S 15,000.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 804020000 -Supplies &Materials Safety and Office Supplies S$17,900.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA Circuits &Radio -To Bernic{804030000 -Other Costs Bradley circuits to Bernice Lake Radio (HEA)S 35,695.00 HEA {542 -Maintenance of Structures HEA O&M Contract 804020000 -Supplies &Materials Upgrade &Repair $10,713.00 HEA {542 -Maintenance of Structures HEA O&M Contract 803010000 -Contractual Fire Systems Certification S 10,000.00 HEA [542 -Maintenance of Structures HEA O&M Contract 804020000 -Supplies &Materials General Building Repairs $39,000.00 HEA [542 -Maintenance of Structures HEA O&M Contract 806010000 -Equip &Machinery Power Tools $7,000.00 HEA AP Page 3 of 11 HEA |542 -Maintenance of Structures HEA O&M Contract 804020000 -Supplies &Materials Overhead Door Repair Supplies $4,000.00 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract 803010000 -Contractual Civil Engineering -S 6,500.00 HEA |543 -Maintenance of Res.,Dams Nuka Repair 803010000 -Contractual Nuka Diversion Repair S 15,000.00 HEA [543 -Maintenance of Res.,Dams Powerhouse Tunnel Maintenanq803010000 -Contractual Power Tunnel and Diversion Tunnel Maintenance]$15,000.00 HEA {544 -Maint of Electric Plant HEA O&M Contract 802010000 -Travet Travel S 4,500.00 HEA {544 -Maint of Electric Plant HEA O&M Contract 803010000 -Contractual Misc.Service Contracts S 60,000.00 HEA [544 -Maint of Electric Plant HEA O&M Contract 803010000 -Contractual Relay Maint.$10,000.00 HEA {544 -Maint of Electric Plant HEA O&M Contract 804020000 -Supplies &Materials Supplies &Materials $20,000.00 HEA {545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract 803010000 -Contractual Misc.Service Contracts S 3,900.00 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract 804020000 -Supplies &Materials Consumables $35,000.00 HEA {556 -System Control &Load Dispatching HEA O&M Contract 803010000 -Contractual SCADA Maint S 5,000.00 HEA [556 -System Control &Load Dispatching HEA O&M Contract 803010000 -Contractual DCS,PCs &Electronic Ops.$48,000.00 HEA 1556 -System Control &Load Dispatching HEA O&M Contract 804020000 -Supplies &Materials Supplies &Materials $6,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 802010000-Travel General Maintenance/Patrol $40,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 802010000 -Travel ROW Clearing S 5,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 802010000 -Travel Bradley/SOL RAS Scheme S 2,000.00 HEA |571 -Maint.Of Overhead Lines HEA O&M Contract 802010000-Travel Bradley 115 Breaker Sync S$2,000.00 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 802010000 -Travel $- HEA |571 -Maint.Of Overhead Lines HEA O&M Contract 803010000 -Contractual ROW Clearing $50,000.00 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 803010000 -Contractual Bradley/Sol RAS Scheme S 18,000.00 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 803010000 -Contractual Bradley 115 kV Breaker Sync $18,000.00 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 804020000 -Supplies &Materials General Maintenance/Patrol $15,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 804020000 -Supplies &Materials Bradley/SOL RAS Scheme $2,000.00 HEA |571 -Maint.Of Overhead Lines HEA O&M Contract 804020000 -Supplies &Materials Bradley/115 kV Breaker Sync $2,000.00 HEA [925 -Injury &Damages HEA O&M Contract 809010000 -Administrative expense [Insurance -General Liability S 11,000.00 HEA }925 -Injury &Damages HEA O&M Contract 809010000 -Administrative expense |Insurance -Aviation $45,000.00 HEA $- $938,215.00 O&M (non payroll)$784,215.00 transmission (non payroll)$154,000.00 $938,215.00 Labor $1,766,090.75 O&M $938,215.00 S$2,704,305.75 HEA AP Page 4 of 11 Account Bradley Lake Capital Projects Draft Budget FY 2018 Account Description FY2016 FY2017 FY2018 (DRAFT Rev 0) Comments 335.00 335.06 335.17 335.19 332.03 333.05 333.7? 333.2? 333.2? 333.2? 333.2? 333.2? 333.2? 333.7? 333.7? 333.7? Replace/Automate Fish Water Valves &Actuators Fire Alarm System Replacement ($290,000 carried overin2015)$150,000 Weather Station (Airport)$ Surveillance Cameras (DAM) 15,000 Fishwater Screen Debris Removal,diving activities,sonar pre- inspection prior to debris removal $703,071 Turbine Nozzle Repair $1,130,000 Equipment storage shed (unheated bus barn} 1 ton Flatbed with Plow Battle Creek Bridge Repair Refurbishment (2) Mobil Crane 40 to 50 tons (used) Replace Michigan Loader Upgrade Crews Quarters Kitchen Replace 1988 Suburban Ambulance 1/2 ton Pick up truck Upgrade four (4)Residence kitchens Replace High Bay Lighting in Power Plant $ $ $ $ $ 25,000 $225,000 350,000 $350,000 $100,000 $65,000 $182,000 $100,000 $350,000 $90,000 $65,000 $35,000 $75,000 $20,000 Start in FY 2017 most of billing will be in FY2018 Start in FY 2017 most of billing will be in FY2018.This project has been identified for many years and funded.Manpower constraints have prevented the completion on this project in past years. Complete Complete/additional work on Unit #2 pending.Note we are monitoring Unit 2 for any degradation.We may need to make a mid year budget adjustment if work is required. Currently the heavy equipment is stored outside in the weather.The D Hittle report noted the deleterious effects of weather on the boom truck as well as the other equipment. Heavier truck for snow removal and general hauling to the dam as existing pick up trucks are often too small for the loads.This replaces the curranty 1999 plow truck.It should be noted that the Boom truck is near end of life and this truck will replace the hauling function of the boom truck. These two bridges are decaying and if not repaired they will fail.Failure would be a very expensive proposition as the bridges would need to be completely removed. Used to erect equipment building and assist in general construction like the bridge removal.This Crane is required for general Plant support as the Boom Truck is nearing end of life (See D Hittle report). Slated for replacement in 2020 in D Hittle report.Updated amount based on NC Machinery web site.This is a critical piece of plant equipment used extensively for snow removal and material handling the current loader is nearly 30 years old.it is difficult to get parts and materials for this equipment as Michigan is now owned by Volvo.We are seeing metal in the transmission oil and this indicates potential failure.We are currently changing oil often to extend the life of the loader. The Crews Quarters kitchen is in sore need of repair and refurbish.The current kitchen is 30 years old and is not adequate to meet any health standards. The existing ambulance is 29 years old.Though called an ambulance it is a vehicle dedicated for transport of an injured individual with first aid supplies on board,backboard,stokes litter,splints,bandages,AED,oxygen and other first responder supplies.It is not possible to transport a person ona stretcher in a pickup truck in winter. Additional use truck for BLPP personnel The kitchens and bathrooms in the residences date from 1991 and are in poor to fair condition.They have seen 30 years of continuous use.This is to update all four kitchens in the residences. Replace existing HID lighting with modern energy efficient light fixtures. Based on an energy cost at Bradley of $.09 per KWh these fixtures will have a positive payback in 2 years.These fixtures will also reduce maintenance costs due to lack of the need to replace bulbs Total $1,998,071 $375,000 $1,657,000 77.37% Tro HEA Cap Proj notes Upgraded comments 3/13/17 rhd Upgraded comments 3/13/17 rhd Upgraded comments 3/13/17 rhd Upgraded comments 3/13/17 rhd Upgraded amount to reflect Architect's estimate 3/13/17 thd Upgraded amount to reflect Architect's estimate 3/13/17 thd Added at O&D meeting 3/13/17 Sof it Bradley Lake Operations &Maintenance Budget Entry Page -Payroll FY 2018 Budget Summary budget comparison to prior year-CEA Payroll FY2016 FY2017 251,852.40 130,413.70 Comments: és ie Sie Payroll ies a st Rate he maeferaAa Rate =Total Cost.=CEA {562-Station Expenses CEA SVC/Substation Maint.Con Substation Lineman 79.45 550.00 107,186.80 CEA {562-Station Expenses CEA SVC/Substation Maint.ConjRelay Technician 77.90 140.00 16,539.20 CEA - CEA - CEA : CEA - CEA - CEA - 123,726.00 'CEA Payroll Page 6 of 11 Bradley Lake Operations &Maintenance Budget Entry Page-AP &Other FY 2018 Budget Summary budget comparison to prior year -CEA AP &Other %change FY2016 FY2017 FY2018 FY17 to FY18 156,246.00 59,773.00 59,773.00 0.0% No change from prior year Den .'.=rl om STR A 3,%;,2 ,r jo 0 ele a a S,}AP Deta ve D O oe O CEA {562 -Station Expenses CEA SVC/Substation Maint.Contract 804020000 -Supplies &Materials Relay /Substation Materials $16,000.00 CEA {562 -Station Expenses CEA SVC/Substation Maint.Contract 802010000 -Travel Relay /Substation Travel S$6,000.00 CEA {562 -Station Expenses CEA SVC/Substation Maint.Contract 803010000 -Contractual Substation Professional Services S 4,000.00 CEA |562 -Station Expenses CEA SVC/Substation Maint.Contract 804030000 -Other Costs Substation Other Costs S 4,000.00 CEA 4539 -Misc.Hydraulic Power Gen EJCEA Circuits -Bernice Lake to Anch 804030000 -Other Costs Bradley Circuits -Bernice Lake to Anchorage iS 29,773.00 CEA CEA CEA CEA $59,773.00 Payroll $123,726.00 AP $59,773.00 Total $183,499.00 Labor and O&M $183,499.00 Capital Projects 1,400,000.00 $1,583,499.00 CEA AP >Page 7 of 11 Bradley Lake Capital Projects Draft Budget FY 2018 (DRAFT Rev 0) Account Account Description FY2016 FY2017 FY2018 SVC Upgrades at Daves Creek and Soldotna Substations S 2,492,423 $5,665,684 $1,400,000 Estimate Total S 2,492,423 $5,665,684 $1,400,000 $9,558,107 ABB Contract total S 7,736,000.00 ABB Contract by month $773,600.00 S$773,600.00 $773,600.00 $1,160,400.00 §1,160,400.00 §1,160,400.00 $773,600.00 $773,600.00 $386,800.00 10% 10% 10% 15% 15% 15% 10% 10% 5% 16-May 16-Jun 16-Jul 16-Sep 17-Jan 17-Mar 17-May 17-Jul 17-Aug $1,747,200.00 fy 2016 cost $2,002,800.00 fy 2017 cost through 1-1-2017 $3,094,400.00 fy 2017 estimate ABB cost through 6-30-17 $500,000.00 fy 2017 estimate labor,OH &Misc cost through 6-30-17 $5,597,200.00 fy 2017 estimated total S 1,160,400.00 fy 2018 estimate ABB cost through 6-30-18 $200,000.00 fy 2018 estimate labor,OH &Misc cost through 6-30-18 $1,360,400.00 fy 2018 estimated total $8,704,800.00 TOTAL CEA Cap Proj Page 8 of 11 Bradley Lake Operations &Maintenance Budget Entry Page -Payroll FY 2018 Budget bide ele Ble * AEA $ AEA §: AEA $ AEA .§ AEA None in FY2018 $: AEA $: AEA $: AEA $- AEA $- AEA $ AEA $- $- HEA $-_1,766,090.75 CEA $123,726.00 AEA $- Total Payroll $1,889,816.75 HEA $938,215.00 CEA $59,773.00 AEA $_1,705,585.00 TotalAP $-_2,703,573.00 HEA $__2,704,305.75 CEA $183,499.00 AEA $__1,705,585.00TotalAP&Payroll $-4,593,389.75 AEA Payroll Page 9 of 11 Bradley Lake Operations &Maintenance Budget Entry Page -AP &Other FY 2018 Budget Summary budget comparison to prior year -AEA AP &Other FY2016 -F¥2017 FY2018 %change FY17 to FY18 1,808,280.00 1,754,770.00 1,705,585.00 -2.8% Decrease due to reduction in USGS streamgauging Deptt FERC Pasar SAARINENSO Activity BERET PRT SEMAN Cost Type "Fe ORTSeraeeesare AP Detail Description **- =Total Cost 2 AEA AP AEA {540 -Rents Bradley Lake FERC land use Fees 804030000 -Other Costs Bradley Lake FERC land use fees $318,000.00 AEA {556 -System Control &Load Dispatch)SCS Snow Measurement 803010000 -Contractual SCS Snow Measurement $10,000.00 AEA |556 -System Control &Load Dispatch UA Seismic monitoring/reporting 803010000 -Contractual UAF Seismic monitoring and reporting $62,000.00 AEA |556 -System Control &Load Dispatchy USGS Stream gauging 803010000 -Contractual USGS Streamgauging S 213,137.00 AEA [556 -System Control &Load DispatchyState of Alaska Permits 804030000 -Other Costs State of Alaska Permits $350.00 AEA {920 -Administrative Expense AEA Admin Fee 809010000 -Administrative expense AEA Bradley Fixed Admin Fees $200,000.00 AEA {920 -Administrative Expense Bradley Lake Audit fees 809010000 -Administrative expense Audit fee $16,800.00 AEA |920-Administrative Expense Bradley Lake PMC Legal 809010000 -Administrative expense Legal fees $25,000.00 AEA |920 -Administrative Expense Bradley Lake Arbitrage Report 809010000 -Administrative expense Arbitrage fee s 3,380.00 AEA |920 -Administrative Expense Bradley Lake Trustee fees 809010000 -Administrative expense Trust &Account fees Ss 11,918.00 AEA [920 -Administrative Expense Miscellaneous Admin 809010000 -Administrative expense NHA membership S 10,000.00 AEA {924 -Property Insurance Project Insurance Premiums 809010000 -Administrative expense Insurance Premiums $525,000.00 AEA [928 -Regulatory Commission ExpensdFERC administrative fees 809010000 -Administrative expense FERC administrative fees $185,000.00 AEA }|928 -Regulatory Commission ExpensqFERC administrative fees 809010000 -Administrative expense Contractual Engineer -FERC license issues $125,000.00 AEA AEA $1,705,585.00 Labor and O&M $ 1,705,585.00 Capital Projects 350,000.00 $_2,055,585.00 Page 10 of 11 Bradley Lake Capital Projects Draft Budget FY 2018 a (DRAFT Rev 0) Account Account Description FY2016 FY2017 FY2018 Comments Start license amend process w Initial Consultation Document and environmental/engineering studies.Benefits 2500 MW additional annual plus hold an additional 27,500 ac-ft/MWh that dam can hold and shift into - . -,00 P ..,.F>>$350,000 winter.Spillway raise Total cost (license,engineering,environmental,& construction estimated $3.3M to $4.5M.Depending on energy value & Spillway Raise license mod,engineering,&environ studies.frequency of wet years value may be greater than $500,000/yr. Total $-$-$350,000 $350,000 AEA Cap Proj Page 11 of 11 TAK ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT 2018 DRAFT BUDGET Date :03/13/17 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT 2018 Budget Contents Schedule Description Page # Overview of Budget Changes between FY17 Amended Budget and FY18 Draft Budget 3 Schedule A Budget Summary 4 Schedule A-1 Capital Purchases not funded by R&C 5 Schedule B Operations &Maintenance Budget 6-12 Schedule C Monthly Utility Contributions 13 Schedule D R&C Fund Disbursements and Repayments 14 #115/20178:02 AMH:\Accounting\AEA FY 18 FS Shared Files\Bradley Lake\Budget\2018 BradleyBudget-DRAFT-031317-accelerated payments.xIsx 2 of 14 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Overview of Budget Changes between FY17 Amended Budget and FY18 Draft Budget FY17 Amended Budgeted Utility Contributions 19,543,371 From Schedule A REVENUES Increase in projected Interest Earnings (90,000) (90,000) EXPENSES Decrease in O&M Operations (560,723) Decrease in R&C Fund Repayments (469,476) Increase in Non R&C Capital Projects 1,057,000 Decrease in Operating Reserve Fund Requirement (26,614) Increase in Debt Service 351,900 Increase in projected Arbitrage Transfer 13,904 365,991 Net change in utility contributions 275,991 FY18 Draft Budgeted Utility Contributions 19,819,362 3/15/20178:02 AM2018 BradieyBudget-DRAFT-031317-accelerated payments.xlsxOverview Page 3 of 14 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Budget Summary Schedule A FY2015 FY2016 FY2017 FY2018 INC(DEC)FRM ACTUALS ACTUALS AMENDED DRAFT PY AMENDED REVENUES,EXPENSES &CHANGES IN SURPLUS BUDGET BUDGET BUDGET REVENUES UTILITY CONTRIBUTIONS 16,680,264 17,828,513 19,543,371 -19,819,362 275,991 UTILITY CONTRIBUTIONS-Battle Creek 0 0 800,000 .0 (800,000) INTEREST INCOME 1,856,550 1,930,547 1,755,000 1,845,000 90,000 18,536,814 19,759,060 22,098,371 21,664,362 (434,009) EXPENSES OPERATIONS 3,977,749 4,273,634 5,154,110 4,593,387 (560,723) RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS)1,370,494 2,692,710 3,262,783 ©2,793,307 (469,476) NON R&C FUND CAPITAL PURCHASES-SEE Ai 254,039 26,444 250,000 4,307,000 1,057,000 NON R&C FUND CAPITAL PURCHASES-Battle Creek 0 0 800,000 °0 (800,000) TRANSFER TO (FROM)OPERATING RESERVE 160,366 (9,747)(85,531)(112,145)(26,614) DEBT SERVICE (net of Capital Reserve Reductions)12,475,850 12,494,600 12,426,200 12,778,100 .351,900 ARBITRAGE TRANSFER 298,316 281,419 290,809 304,713 13,904 18,536,814 19,759,060 22,098,371 21,664,362 |(434,009) CURRENT YEAR SURPLUS (DEFICIT)0 0 0 0 BEGINNING SURPLUS (DEFICIT)0 0 0 [) ENDING SURPLUS (DEFICIT)0 0 0 0 '.beac iat 4 ads *Bhan wor Sete Kaa ake a2 fer Sed a hs a wh BALANCE SHEET ASSETS REVENUE FUND 431,911 385,309 0 0 OPERATING FUND 1,852,035 1,403,738 (*]0 RECEIVABLE FROM R&C 20,212 1,055,961 0 0 OTHER RECEIVABLES 520,416 0 0 0 PREPAID EXPENSES §2,258 85,194 0 0 2,876,832 2,930,202 0 0 LIABILITIES &SURPLUS LIABILITIES 1,462,367 809,828 0 0 PAYABLE TO UTILITIES O&M 1,394,253 1,064,413 0 0 PAYABLE TO UTILITIES R&C 20,212 1,055,961 0 0 2,876,832 2,930,202 0 0 Por eccce eases ae Dito aie 2 senate aniindondll hi bt sented fie coal OTHER INFORMATION OPERATING RESERVE *1,084,100 1,116,353 1,030,822 918,677 MONTHLY CONTRIBUTIONS (FY18-accelerated over 6 months)1,507,894 1,654,119 1,628,614 3,303,227 *Required to be 20%of budgeted operating expense 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch A \w ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Capital Purchases Not Funded by R&C Fund Schedule A-1 FY15 FY16 FY17 FY18 PROJECTED DRAFT Capital Project Description ACTUALS ACTUALS ACTUALS BUDGET |Comments Replace Fish Water Valve Actuators :26,444 -- OCS Security Interface for Data Access 141,703 --- Lube Oil Purification System 47,723 --- Replace 1998 Chevrolet Crew Cab Vehicle 32,306 --- Replace 1990 Ford Single Cab Vehicle 32,306 --- Replace/Automate Fish Water Valves &Actuators ..25,000 225,000 Start in FY 2017 most of billing will be in FY2018 ($250,000 total -$25,000 FY17 and$225,000 FY18) A Currently the heavy equipment is stored outside in the weather.The D Hittle report noted thetihed(unh °-«Equipment storage shed (unheated bus bam)100,000 deleterious effects of weather on the boom truck as well as the other equipment. Heavier truck for snow removal and general hauling to the dam as existing pick up trucks are ,ften too small for the loads.This replaces the curranty 1999 plow truck.It should be noted1tonFlatbedwithPlow-- °on Flawed 65,000 [that the Boom truck is near end of Ife and this truck wil replace the hauling function of theboomtruck. Battle Creek Bridge Repair Refurbishment (2)...482,000 These two bridges are decaying and if not repaired they will fail.Failure would be a veryexpensivepropositionasthebridgeswouldneedtobecompletelyremoved. Used to erect equipment building and assist in general construction like the bridge removal. Mobil Crane 40 to 50 tons (used)..-100,000 [This Crane is required for general Plant support as the Boom Truck is nearing end of life (See D Hittle report). Slated for replacement in 2020 in D Hittle report.Updated amount based on NC Machinery web site.This is a critical piece of plant equipment used extensively for snow removal and 7 Michi d ... material handling the current loader is nearly 30 years old.It is difficult to get parts andReplaceMichiganLoader350,000 materials for this equipment as Michigan is now owned by Volvo.We are seeing metal in the transmission oil and this indicates potential failure.We are currently changing oil often to extend the life of the loader. Upgrade Crews Quarters Kitchen ...90,000 The Crews Quarters kitchen is in sore need of repair and refurbish.The current kitchen is 30Yearsoldandisnotadequatetomeetanyhealthstandards. The existing ambulance is 29 years old.Though called an ambulance it is a vehicle dedicated for transport of an injured individual with first aid supplies on board,backboard,i 198 burban Ambul.©=2Replace1988SuburbanAmbulance 85,000 stokes litter,splints,bandages,AED,oxygen and other first responder supplies.{tis not possible to transport a person on a stretcher in a pickup truck in winter. 1/2 ton Pick up truck ---35,000 fAdditional use trick for BLPP personnel The kitchens and bathrooms in the residences date from 1991 and are in poor to fair Upgrade Residence kitchens -2 ©75,000 {condition.They have seen 30 years of continuous use.This is to update all four kitchens in the residences. Replace existing HID lighting with modem energy efficient light fixtures.Based on an energy Replace High Bay Lighting in Power Plant 20,000 Jcost at Bradley of $.09 per KWh these fixtures will have a positive payback in 2 years.These fixtures will also reduce maintenance costs due to lack of the need to replace bulbs Total Non R&C Capital Purchases paid for by all utilities 254,039 26,444 25,000 1,307,000 [Battle Creek Diversion t -4 -|800,000 f -{ Total Non R&C Capital Purchases paid for by HEA,CEA,GVEA,MEA,Seward --800,000 -- Total Non R&C Capital Purchases 254,039 26,444 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xtsxSch A-1 825,000 1,307,000 \' Page 5 of 14 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Operations &Maintenance Budget Summary Budget by Participant Schedule B HEA 3,052,652 HEA 3,365,387 HEA 3,209,154 HEA 2,704,303 CEA 553,000 CEA 408,098 CEA 190,187 CEA 183,499 AEA 1,814,850 AEA 1,808,280 AEA 1,754,770 AEA 1,705,585 FYiS FY16 FY17 Fy18 FY15 FY16 FY17 Fy18 Increase Amended (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 |Budget to date Budget from PY y by cost type Labor &Benefits 1,986,848 1,713,440 273,408 2,143,223 1,738,336 404,887 2,005,079 744,386 1,260,693 1,889,814 (118,265) Travel 35,410 18,528 19,882 98.600 13,796 84,804 132,950 10,255 122,695 76,950 (56,000) Training 38,731 26,569 12,162 38,731 10,819 27,912 49,300 1,619 47,681 49,300 - Contractual 871,280 618,735 252,545 1,205,659 813,606 392,053 4,217,418 375,639 841,779 841,062 (376,356) Supplies &Materials 435,919 224,296 211,623 275,760 95,952 179,808 229,358 29,114 200,244 183,345 (46,013) Other Costs §93,797 225,712 368,085 451,846 375,357 76,489 381,744 111,062 270,682 387,818 6,074 Equipment &Machinery 30,130 23,711 6,419 33,130 6,051 27,079 11,500 850 10,650 7,000 (4,500) Maintenance Projects 60,000 27,414 32,586 13,000 3,457 9,543 ----- Administrative Costs 1,368,387 4,102,344 266,043 1,321,817 1,216,260 105,557 1,126,761 §11,053 615,708 1,158,098 31,337 5,420,502 3,977,749 1,442,753 5,581,766 4,273,634 1,308,131 5,154,110 1,783,977 3,370,134 4,593,387 (560,723) FERC 535 -Operation Supervision &Engineering Operations Sup/Eng Bradley Lake Operating . Labor &Benefits 291,632 282,780 8,852 304,235 321,664 (17,429)299,649 130,170 169,479 265,587 (34,062) Travel 8,610 12,894 (4,284)9,500 9,281 219 10,450 8,496 1,954 10,450 - Training 7,904 4,116 3,788 7,904 2,080 5,824 9,300 -9,300 9,300 - Contractual 1,445 -1,445 1,445 -1,445 1,400 -1,400 1,000 (400) Supplies &Materials 6,203 344 §,859 6,203 346 §,857 4,100 -4,100 4,000 (100) Bradley Lake Operating Total 315,794 300,134 15,660 329 287 333,371 (4,084)324,899 138,666 186,233 290,337 (34,562) FERC 535 -Operation Supervision &Engineering Total 315,794 300,134 15,660 329,287 333,371 (4,084)324,899 138,666 186,233 290,337 JHEA (34,562) FERC 537 -Hydraulic Expenses Hydraulic Expenses Bradley Lake Operating Labor &Benefits 95,056 76,200 18,856 95,273 81,677 13,596 92,746 33,446 59,300 94,453 1,707 Contractual 19,504 8,000 11,504 17,180 -17,180 4,000 5,647 (1,647)2,000 (2,000) Supplies &Materials 2,608 -2,608 2,608 1,277 1,331 2,900 179 2,721 2,000 (900) Bradley Lake Operating Total 117,168 84,200 32,968 115,061 82,954 32,107 99,646 39,272 60,374 98,453 (1,193) FERC $37 -Hydraulic Expenses Total 117,168 84,200 32,968 115,061 82,954 32,107 99,646 39,272 60,374 98,453 [HEA (1,193) 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch B Page 6 of 14 FY15 FY16 FY17 Fvi8 FY15 FY16 FY17 FY18 Increase Amended (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 }Budget to date Budget from PY FERC 538 -Electric Expenses Electric Expenses Bradley Lake Operating Labor &Benefits 224,000 234,351 (10,351)257,107 215,440 41,667 242,940 98,375 144,564 232,294 (10,646) Travel ------7,000 1,759 5,241 7,000 * Training 30,827 18,383 12,444 30,827 8,739 22,088 25,000 1,619 23,381 25,000 - Contractual 21,342 14,055 7,287 3,342 1,400 1,942 2,000 1,400 600 2,000 - Supplies &Materials 6,232 2,184 4,048 12,232 6,241 5,991 8,500 4,214 4,286 9,732 1,232 Bradley Lake Operating Total 282,401 268,973 13,428 303,508 231,820 71,688 285,440 107,367 178,072 276,026 (9,414) FERC 538 -Electric Expenses Total 282,401 268,973 13,428 303,508 231,820 71,688 285,440 107,367 178,072 276,026 {HEA (9,414) FERC 539 -Misc.Hydraulic Power Generation Expenses Misc Hydro Power Exp Bradley Lake Operating Labor &Benefits 192,000 114,373 77,627 189,473 158,532 30,941 178,991 73,876 105,116 179,530 539 Training -4,070 (4,070)---15,000 -15,000 15,000 - Contractual 239,571 142,752 96,819 315,249 285,812 29,437 297,048 95,836 201,212 287,525 (9,523) Supplies &Materials 94,878 18,473 76,405 22,000 19,044 2,959 17,900 7,258 10,642 17,900 - Bradley Lake Operating Total 526,449 279,668 246,781 §26,722 463,385 63,337 508 939 176,970 331,969 499.955 [HEA (8,984) BRADLEY CIRCUITS/RADIO TO BERNICE LK Other Costs 30,000 28,740 1,260 30,000 31,059 (1,059)35,695 17,848 17,847 35,695 - BRADLEY CIRCUITS/RADIO TO BERNICE LK Total 30,000 28,740 1,260 30,000 31,059 (1,059)35,695 17,848 17,847 35,695 HEA - BRADLEY CIRCUITS BERNICE LK TO ANCH Other Costs 30,000 31,485 (1,485)28,746 29,864 (1,118)29,773 14,770 15,003 29,773 - BRADLEY CIRCUITS BERNICE LK TO ANCH Total 30,000 31,485 (1,485)28,746 29,864 (4,118)29,773 14,770 15,003 29,773 |CEA FERC $39 -Misc.Hydraulic Power Generation Expenses Total 586,449 339,893 246,556 585,468 524,308 61,160 574,407 209,588 364,820 565,423 (8,984) FERC S40 -Rents FERC Land Use Fee Bradley Lake Operating Other Costs 180,000 137,230 42,770 183,000 279,876 (96,876)312,176 78,044 234,132 318,000 5,824 Bradley Lake Operating Total 180,000 137,230 42,770 183,000 279,876 (96,876)312,176 78,044 234,132 318,000 §,824 FERC 540 -Rents Total 180,000 137,230 42,770 183,000 279,876 (96,876)312,176 78,044 234,132 318,000 [AEA 5,824 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch B Page7of14 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Increase Amended (Over)Under Aroended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 |Budget to date Budget from PY FERC 541 -Maintenance Supervision &Engineering Maint Supervision/Eng Bradley Lake Operating Labor &Benefits 214,230 197,018 17,212 222,118 239,299 (17,181)224,284 94,624 129,660 272,586 48,302 Bradley Lake Operating Total 214,230 197,018 17,212 222,118 239,299 (17,181)224,284 94,624 129,660 272,586 48,302 FERC 541 -Maintenance Supervision &Engineering Total 214,230 197,018 17,212 222,118 239,299 (17,181)224,284 94,624 129,660 272,586 THEA 48,302 [FERC 542 -Maintenance of Structures Maintenance of Structures Bradley Lake Operating . Labor &Benefits 96,200 75,264 20,936 95,273 89,890 5,383 92,746 33,368 59,378 94,453 1,707 Contractual ::-:-:10,000 :10,000 40,000 - Supplies &Materials 64,273 10,009 54,264 61,273 23,398 37,875 §3,713 398 §3,315 53,713 - Equipment &Machinery 8,500 10,769 (2,269)11,500 6,051 5,449 11,500 850 10,650 7,000 (4,500) Maintenance Projects 6,000 -6,000 4,000 1,827 2,173 ----- Bradley Lake Operating Total 174,973 96,042 78,931 172,046 121,166 50,880 167,959 34,616 133,343 165,166 (2,793) FERC 542 -Maintenance of Structures Total 174,973 96,042 78,931 172,046 121,166 50,880 167,959 34,616 133,343 165,166 JHEA (2,793) FERC 543 -Maintenance of Reservoirs,Dams &Waterways Maint Res,Dams,WWays Bradley Lake Operating Labor &Benefits 49,950 42,309 7,644 51,276 42,848 8,428 50,409 49,440 969 50,610 201 Contractual 28,769 630 28,139 5,200 9,080 (3,880)5,200 63,704 (58,504)6,500 1,300 Bradley Lake Operating Total 78,719 42,939 35,780 56.476 51,928 4,548 55,609 113,144 (57,535)57,110 1,501 BRADLEY NUKA REPAIR Contractual ----.:15,000 409 14,591 15,000 - Supplies &Materials -787 (787)-------- Equipment &Machinery 21,630 12,942 8,688 21,630 -21,630 ----- BRADLEY NUKA REPAIR Total 21,630 13,729 7,901 21,630 -21,630 15,000 409 14,591 15,000 - BRADLEY POWER TUNNEL MAINT (Dam) Contractual 56,000 43,131 12,869 20,000 3,673 16,327 15,000 311 14,689 15,000 - BRADLEY POWER TUNNEL MAINT (Dam)Total 56,000 43,131 12,869 20,000 3,673 16,327 15,000 311 14,689 15,000 - BRADLEY POWER TUNNEL DRAIN CLN/INSP (P/House) Maintenance Projects 9,000 -9,000 9,000 1,557 ------ BRADLEY POWER TUNNEL DRAIN CLN/INSP (P/House)Total 9,000 -9,000 9,000 1,557 ------ FERC 543 -Maintenance of Reservoirs,Dams &Waterways Total 165,349 99,799 65,550 57,158 49,948 85,609 113,864 (28,255)87,110 [HEA 1,501 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch B a 2 Page8of 14 FY15 FY16 FY1i7 FY18 FY15 FY16 FY17 Fv18 Increase Amended (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 |Budget to date Budget from PY FERC 544 -Maintenance of Electric Piant Maintenance of Elec Plant Bradley Lake Operating Labor &Benefits 379,600 323,757 55,843 381,093 336,417 44,676 370,983 134,127 236,856 379,102 8,119 Travel 2,800 158 2,642 3,500 3,270 230 4,500 :4,500 4,500 - Contractual 61,849 33,765 28,084 91,443 69,651 21,792 79,000 10,607 68,393 70,000 (9,000) Supplies &Materials 27,245 20,650 6,595 *27,245 10,142 17,103 27,245 5,867 21,378 20,000 (7,245), Maintenance Projects 25,000 25,000 --------- Bradley Lake Operating Total 496,494 403,330 93,164 503,281 419,480 83,801 481,728 150,601 331,127 473.602 (8,126) FERC 544 -Maintenance of Electric Plant Total 496,494 403,330 93,164 503,281 419,480 83,801 481,728 150,601 331,127 473,602 JHEA (8,126) [FERC 545 -Maintenance of Misc.Hydraulic Plant Maint of Misc Hydr Plant Bradley Lake Operating Labor &Benefits 95,680 78,186 17,494 95,273 94,653 620 92,746 33,825 58,921 94,453 1,707 Contractual 3,900 170 3,730 3,900 -3,900 3,900 -3,900 3,900 - Supplies &Materials 71,281 40,220 31,061 43,000 28,044 14,956 43,000 6,626 36,374 35,000 (8,000) Bradley Lake Operating Total 170.861 118,576 52,285 142,173 122,697 19,476 139,646 40,451 99,195 133,353 (6,293) BRADLEY FISH WATER DSGN/MIDDLE FORK SHACK IMPR Contractual 30,900 -30,900 24,900 -24,900 20,000 :20,000 -(20,000) BRADLEY FISH WATER DSGN/MIDDLE FORK SHACK IMPR Total 30,900 -30,900 24.900 -24,900 20,000 -20,000 -(20,000) FERC 545 -Maintenance of Misc.Hydraulic Plant Total 201,761 118,576 83,185 167,073 122,697 44,376 159,646 40,451 119,195 133,353 JHEA (26,293) FERC 556 -System Control &Load Dispatching System Cnt!&Load Disp Bradley Lake Operating Labor &Benefits 48,000 19,514 28,486 49,000 10,478 38,522 49,502 17,812 31,689 20,618 (28,884) Contractual 5,000 -5,000 8,500 31 8,469 60,500 2,364 §8,136 53,000 (7,500) Supplies &Materials 6,199 2,297 3,902 6,199 4,090 2,109 6,000 1,850 4,150 6,000 - Bradley Lake Operating Total 59,199 21,811 37,388 63,699 14,599 49,100 116,002 22,026 93,976 79,618 IHEA (36,384) BRADLEY POWERHOUSE PC'S Contractual 30,500 3,201 27,299 50,000 37,261 12,739 ---:- BRADLEY POWERHOUSE PC'S Total 30,500 3,201 27,299 50,000 37,261 12,739 -a --HEA - BRADLEY DISPATCH REGULATIONS Maintenance Projects 20,000 -20,000 -:----.- BRADLEY DISPATCH REGULATIONS Total 20,000 -20,000 -------HEA : 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch B Page 9 of 14 FY15 FY16 FY17 Fvi8 FY15 FY16 FY17 FY18 increase Amended (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 |Budget to date Budget from PY Snow Measurement Bradley Lake Operating Contractual 41,000 10,000 1,000 10,000 10,000 -10,000 5,000 5,000 10,000 JAEA - Bradley Lake Operating Total 11,000 10,000 1,000 10,000 10,000 -40,000 5,000 §,000 10,000 - Seismic Service Bradley Lake Operating Contractual 60,000 64,477 (4,477)62,000 60,370 1,630 60,370 35,255 25,115 62,000 [AEA 1,630 Bradley Lake Operating Total 60,000 64,477 (4,477)62,000 60,370 1,630 60,370 35,255 25,115 62,000 1,630 Streamguaging Serv Bradley Lake Operating Contractual 295,000 296,409 (1,409)296,000 301,338 (5,338)310,000 78,582 231,418 213,137 [AEA (96,863) Bradley Lake Operating Total 295,000 296,409 (1,409)296,000 301,338 (5,338)310.000 78,582 231,418 213,137 (96,863) Permits Bradley Lake Operating Other Costs 100 350 (250)100 350 (250)100 100 -350 JAEA 250 Bradley Lake Operating Total 100 350 (250)100 350 (250)100 400 -350 250 FERC 556 -System Control &Load Dispatching Total 475,799 396,248 79,551 481,799 423,918 57,881 496,472 140,963 355,509 365,105 (131,367) FERC 562 -Station Expenses Station Expenses CEA SVC/Substation Maintenance Contract Labor &Benefits 300,500 269,688 30,812 251,852 147,344 104,508 130,414 45,324 85,090 123,726 (6,688) Travel 24,000 2,476 21,524 26,000 (31)26,031 6,000 -6,000 6,000 - Contractual 6,500 2,145 4,355 6,500 1,244 5,256 4,000 3,447 554 4,000 - Supplies &Materials 157,000 129,332 27,668 95,000 2,118 92,882 16,000 2,722 13,278 16,000 - Other Costs -1,085 (4,085)-9,208 (9,208)4,000 300 3,700 4,000 - Maintenance Projects :2,414 (2,414):73 (73)::::: CEA SVC/Substation Maintenance Contract Total 488.000 407,140 80,860 379,352 189,956 219,396 160,414 51,792 108,621 153,726 (6,688) FERC 562 -Station Expenses Total 488,000 407,140 80,860 379,352 159,956 219,396 160,414 $1,792 108,621 153,726 [CEA (6,688) 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch B .2 Page 10 of 14 FY15 FY16 FY17 Fy18 FY15 FY16 FY17 FY18 Increase Amended (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 |Budget to date Budget from PY FERC 571 -Maintenance of Overhead Lines Maint of OH Lines Bradley Lake Operating Labor &Benefits .--146,320 94 146,226 179,671 -179,671 82,402 (97,269) Travel ---54,600 1,276 §3,324 95,000 -95,000 49,000 (46,000) Contractual -:-90,000 33,746 $6,254 50,000 -50,000 86,000 36,000 Supplies &Materials -->-1,255 (1,255)50,000 -50,000 49,000 (31,000) Other Costs 353,697 26,822 326,875 ---:---- Bradley Lake Operating Total 353,697 26,822 326,875 290,920 36,371 254,549 374,671 -374,671 236,402 (138,269) BRADLEY JUNCTION SWITCH REMOVAL Travel ------5,000 -5,000 -(5,000) Contractual ::----70,000 73,076 (3,076)-(70,000) Other Costs ---210,000 25,000 185,000 :--:: BRADLEY JUNCTION SWITCH REMOVAL Total ---210,000 25,000 185,000 75,000 73,076 1,924 -(75,000) MARKER BALL REPLACEMENT Labor &Benefits ---4,929 -4,929 ----- Travel ---5,000 -5,000 5,000 -5,000 -(5,000) Contractual ---200,000 -200,000 200,000 -200,000 -(200,000) MARKER BALL REPLACEMENT Total :--209,929 -209,929 205,000 -205,000 -(205,000) [FERC 571 -Maintenance of Overhead Lines Total 353,697 26,822 326,875 710,849 61,371 649,478 654,671 73,076 581,595 236,402 [HEA (418,269) FERC 920 &930 -Administrative Expense AEA Bradley Fixed Admin Fees Bradley Lake Operating Administrative Costs 200,000 200,000 -200,000 200,000 -200,000 100,000 100,000 200,000 JAEA : Bradley Lake Operating Total 200,000 200,000 -200,000 200,000 -200,000 100,000 100,000 200,000 : Operating Committee Exp-Audit Bradley Lake Operating Administrative Costs 116,250 15,500 100,750 116,250 101,530 14,720 16,494 16,500 (6)16,800 JAEA 306 Bradley Lake Operating Total 116,250 15,500 100,750 116,250 101,530 14,720 16,494 16,500 (6)16,800 306 Operating Committee Exp-Legal Bradley Lake Operating Administrative Costs 25,000 22,110 2,890 25,000 77,719 (52,719)25,000 16,524 8,476 25,000 JAEA - Bradley Lake Operating Total 25,000 22,110 2,890 25,000 77,719 (52,719)25,000 16,524 8,476 25,000 - 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xlsxSch B Page 11 of 14 FY15 FY16 FY17 FY18 Fy15 FY16 FY17 FY18 Increase Amended (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Approved (Decrease) Budget Actual Budget to date Budget Actual Budget to date Budget 12/31/16 }Budget to date Budget from PY Operat Committee Exp-Arbitrage Bradley Lake Operating . Administrative Costs 5,200 3,630 1,570 3,630 7,010 (3,380)3,630 -3,630 3,380 JAEA (250) Bradley Lake Operating Total 5,200 3,630 1,570 3,630 7,010 (3,380)3,630 -3,630 3,380 (250) Trust &Account Fees Bradley Lake Operating Administrative Costs 12,300 11,918 382 12,300 11,918 382 12,000 §,959 6,041 11,918 AEA (82) Bradley Lake Operating Total 12,300 11,918 382 12,300 11,918 382 42,000 5,959 6,041 11,918 (82) Misc Admin Bradley Lake Operating : Administrative Costs ----8,375 (8,375)---10,000 [AEA 10,000 Bradley Lake Operating Total ----8,375 (8,375)---10,000 10,000 FERC 920 &930 -Administrative Expense Total 358,750 253,158 105,592 357,180 406,552 (49,372)257,124 138,983 118,141 267,098 9,974 FERC 924 &925 -Insurance Premiums Insurance Premiums Bradley Lake Operating Administrative Costs 510,000 510,799 (799)510,000 477,981 32,019 500,000 250,747 249,253 "525,000 [AEA 25,000 Administrative Costs 64,637 §2,121 12,516 64,637 52,541 12,096 64,637 26,104 38,533 56,000 [HEA (8,637) Bradley Lake Operating Total 574,637 562,920 11,717 574,637 §30,522 44,115 564,637 276,852 287,785 581,000 16,363 Risk Management Bradley Lake Operating Administrative Costs 35,000 30,000 5,000 --:---- 4CEA - Bradiey Lake Operating Total 35,000 30,000 5,000 -------- FERC 924 &925 -Insurance Premiums Total 609,637 592,920 16,717 574,637 530,522 44,115 564,637 276,852 287,785 581,000 16,363 JFERC 928 -Regulatory Commission Expenses FERC Admin Fees Administrative Costs 250,000 150,519 99,481 210,000 182,885 27,115 180,000 -180,000 185,000 [AEA 5,000 Bradley Lake Operating Total 250,000 150,519 99,481 210,000 182,885 27,115 180,000 -480,000 185,000 5,000 FERC Related Prof Services FERC Part 12 Inspection Administrative Costs ---55.000 35,663 19,337 25,000 1,362 23,638 - JAEA (25,000) Contractual Engineer-FERC license issues Administrative Costs 150,000 105,747 44,253 125.000 60,638 64,362 100,000 93,856 6,144 125,000 JAEA 25,000 Bradley Lake Operating Total 150,000 105,747 44,253 180,000 96,301 83,699 125,000 95,218 29,782 125,000 - FERC 928 -Regulatory Commission Expenses Total 400,000 256,266 143,734 390,000 279,186 110,814 305,000 95,218 209,782 310,000 5,000 Total Bradley Lake Budget 5,420,502 3,977,749 1,442,753 5,581,766 4,273,634 1,308,131 5,154,110 1,783,977 3,370,134 4,593,387 (560,723) 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch B Page 12 of 14 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Monthly Utility Contributions Schedule C FY2015 FY2016 FY2017 FY2018 FY2017 to PERCENT Amended Amended Amended Draft FY2018 POWER PURCHASER SHARE BUDGET BUDGET BUDGET BUDGET Change CHUGACH ELECTRIC 30.4%5,500,800 6,034,236 5,941,176 6,025,086 83,910 MUNICIPALITY OF ANCHORAGE 25.9%4,686,540 5,141,004 5,061,732 5,133,210 71,478 HOMER ELECTRIC 12.0%2,171,364 2,381,928 2,345,208 2,378,328 33,120 MATANUSKA ELECTRIC 13.8%2,497,068 2,739,216 2,696,988 2,735,076 38,088 GOLDEN VALLEY ELECTRIC 16.9%3,058,008 3,354,552 3,302,832 3,349,470 46,638 CITY OF SEWARD 1.0%180,948 198,492 195,432 198,192 2,760 Rounding (5)3 (3) 100.0%18,094,728 19,849,423 19,543,371 19,819,362 275,991 FY2018 PERCENT FY2015 FY2016 FY2017 July1 through FY2018 POWER PURCHASER SHARE MONTHLY MONTHLY MONTHLY December1 ONLY.Change CHUGACH ELECTRIC 30.4%458,400 502,853 495,098 1,004,181 509,083 MUNICIPALITY OF ANCHORAGE 25.9%390,545 428,417 421,811 855,535 433,724 HOMER ELECTRIC 12.0%180,947 198,494 195,434 396,388 200,954 MATANUSKA ELECTRIC 13.8%208,089 228,268 224,749 455,846 231,097 GOLDEN VALLEY ELECTRIC 16.9%254,834 279,546 275,236 558,245 283,009 CITY OF SEWARD 1.0%15,079 16,541 16,286 33,032 16,746 100.0%1,507,894 1,654,119 1,628,614 3,303,227 1,674,613 *In FY18 contributions will be paid evenly over the first six months,beginning July 1,2017 and ending December 1,2017. No payments will be due from January 1,2018 through June 30,2018. (These accelerated payments are due to the cash flow needs of the R&C fund to pay for the SVC replacement project with total estimated cost of $8.7 million) 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisxSch C Page 13 of 14 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT R&C Fund and Repay Schedule D Actual 'Actual Actual 'Actual PROJECTED PROJECTED |PROJECTED PROJECTED |&Achat @ TO REPAY TO REPAY Us *TO REPAY TO REPAY 8 06/30/16 a 06/90/16 Disburse at 06/30/17 at 06/90/18 R&C FUND PROJECTS 627,738.80 4,052,070.14 0.00 4,052,070,14 0.00 4,052,070.14 0.00 4,052,070 14 Replace RFLS 0.00 251,092.69 0.00 251,092.69 0.00 251,092.69 000 251.092 69 Replace Runners 0.00 1,946,732.78 0.00 1,946,732.79 0.00 1,946,732.79 000 1,946 732 79 Replace cable from dam to power house 0.00 2,321 ,922.94 0.00 2,321,922.94 0.00 2,321,922.94 000 2,321,922 94 iReplace power system stabilizer 0.00 619,205.10 0.00 619,205.10 0.00 619,205.10 000 619,205 10 Replace two RTUs 0.00 86,905.27 0.00 86,905.27 0.00 86,905.27 000 86,905.27 Culvert Repairs 0.00 675,966.79 0.00 675,966.79 0.00 675,966.79 000 675 966 79 Trans Towers Frost Jacking Repairs 0.00 887,596.62 0.00 887,596.62 0.00 887,596.62 000 887,596 62 Replace Plant and SCADA Controls 0.00 1,344 ,683.05 0.00 1,344,683.05 0.00 1,344,683.05 000 .1,344,683 05 Vibration Monitoring System 0.00 490.00 0.00 490.00 0.00 490.00 000 -490 00 Battle Creek Feasibiity 0.00 0.00 0.00 0.00 0.00 0.00 000 000 Fire Alarm System Replacement 0.00 0.00 0.00 0.00 0.00 0.00 350,000.00 350,000 00 Battle Creek Diversion 43,605.35 994,333.83 149,683.91 1,144,017.74 2,000.00 1,146,017.74 000 1.146,017 74 Replace Electro-Mechanical Relays 0.00 1,277,197.06 0.00 1,277,197.06 0.00 1,277,197.06 00 1,277,197 06 [Fishwater Screen Debris Removal 21,929.45 21,929.45 290,306.98 312,236.43 0.00 312,236.43 000 312,236.43 Turbine Nozzle Repair 96,423.49 96,423.49]1,320,234.57 1,416,658.06 6,201.06 1,422,859.12 000 1,422,858 12 ISVC replacement Daves Creek |Soldotna 0.00 0.00]1,570,577.34 1,570,577.34 |5,773,822.66 7,344,400.00 |1,360,400 00 8,704,800.00 Spilway Raise 0.00 0.00 0.00 0.00 0.00 0.00 350,000 00 350,000 00: 789,697.09 14,576,549 22 §3,330,802 80 17,907,352.02 |5,782,023.72 23.689 375.74 |2,060 400.00 25,749 775 74 Current Year R&C Repayment (1,146,123.00)(3,461,591.16)(3,262,788.00)(2,793,306.63) Adjust bal to $5 mill (won't be corrected until year end)0.00 0.00 0.00 0.00 Less Interest in Fund Applied to Repayment 44,S82 41 (287,080.93)361,777 62)143,000 00 Net Transfer trom Revenue Fund (1,390,705.41)(3,748,672.09 (3,624,565.62)2,936,306 63)} Cumulative Prior Years R&C Repayments (11,346,045,42)(12,716,539.31)(15,409,249,92)(17,920,612 74) Due back to Utilities 20,211.51 1,055,961.48 1,113,202.79 143,000.00 R&C Cumulative interest (Retained)Applied As Part of Repay 0.00 0.00 0.00 9.00 INet R&C Repayments (11,325,833.91)(11,660,577 83)(14,296,047.12)447,777,612 74)) INET DUE TO R&C FUND 1,860,009.90 2,498,102.10 5,768,763.00 §,035 856 37 R&C FUND CASH FLOW PROJECTION Beginning investment Balance 3,015,716.76 3.212,607.32 5,623,509.49 1,931,991 64 Disbursements-current year (768,797.23)(1,265,152.32)(4,194,471.88)(2,060,400.00) Oe prior year d (17,276.20 (22,899.86)(2,065,650.48)(1,587,551 84) R&C Repayment to utities (178,788.03)(20,211.52)(1,055,961.11)}(1,113,202 79 Net other cash inflow{outfiow)(69,953.03)(29,506.22)0.00 000 Current year interest earnings 244,582.41 287,080.93 361,777.62 143,000 00 Current year Participants Contributions to R&C 1,146,123.00 3,461,591.16 3,262,788.00 2,793,306 63 | Ending investment Balance 3,212,607 68 §,623,509.49 1,931,991.64 107,143 64 lAccrued R&C Payable at year end-Dueto Utiities (20,211.51)(1,055,961.11}(1,113,202.79){143,000 00) Accrued due from Revenue fund (debt service tranefer)69,953.03 IR&C payable back to Revenue fund (99,459.25). Accrued R&C vendor Payable at year end (22,899.85)(2,065,650.48)(4,587,551.84 000 IPROJECTED NET OUE +ENDING INVESTMENT BALANCE 5,000,000.00 5,000,000.00 §,000,000.00 5,000,000 00 REPAYMENT AMOUNT $756,665.11 X25%all 4 years total repaid temaining to '$1,455,830.05 X 25%alt 4 years th yr 363,957.51 mt 6/30/18 pay at 7/1/18 FY19 FY20 Fy21 1$1,401,948.53 X 25%alt 4 years 3rd yr 350,487.13 J4th yr 350,487.13 1,401,948.53 ° $1,834,499.92 X 25%yr 1 |25%yr 2 |50%yr 3)2ndyr 458,624.96 tinal yr 917,249.96 4,834,499.92 . 789,697.09 X 25%yr 1|75%yr 2 'let yr 197 424.27 [final yr 592,272.82 789,697.09 - $3,330,802.80 X 25%yr 11 32%yr 2 [25%yr 3 |18%yr 4 'st yr 832,700.70 [2nd yr 1,065,856.90 [3rd yr 832,700.70 2,731,258.30 (599,544,50)599,544.501$5,782,023.72x 25%all 4 years 'Ast yr 1,445,505.93 J2nd yr 1 445,505 93 2,891,011.86 (2,891,011.86)1,445,505.93 1,445,505.93 $2,060,400 x 25%all 4 years 'tat yr $15,100 00 §15,100.00 (1,845,300.00)515,100.00 515,100.00 515,100.00 . 1,370,493.90 2,692,710.61 72.511,362 83 |2793 306 63 (6,035,656 36)2,560.150.43 1,960.60593 515,100 00 "FV 17 proj reflect and actual for different proj:on which is higher (budgeted or actual,s0 the REC fi e 3/15/20178:02 AM2018 BradleyBudget-DRAFT-031317-accelerated payments.xisx Sch D Page 14 Alaska Energy Authority Financing options for Battle Creek project $46.7M BPMC meeting 3/17/2017 Option 1:Issue 18 year debt with maturity date the same as the FERC license expiration date Short-Term Long-Term Financing Options National Cooperative National Cooperative .50%Tax-Exempt . CoBank Construction Service Corporation Service Corporation Taxable General {|Tax-Exempt General 50%usDA Rural |50%Taxable General|Combined RUS 50%USDA Rural General Obligation Combined RUS Funding conditions Loan (NCSC)CoBank (NCSC)Obligation Bonds Obligation Bonds Utility Service (RUS)Obligation Bonds and Bonds Utility Service (RUS)Bonds and Bonds Finance Amount (§in million)$46,670,000)$46,670,000)$46,670,000 $46,670,000)$46,670,000)$46,670,000 $23,335,000 $23,335,000)$46,670,000)$23,335,000)$23,335,000)$46,670,000) Term (yrs)-18 (FERC Expires 2035)2 years|2 years 18 years 18 years 18 years|18 years 18 years 18 years 18 years 18 years 18 years 18 years (Rate 1)Interest rate (%)as of 3/10/17 US Treasury is 2.94%(for 20 .Libor+spread=US Treasury +125 bp to US Treasury +12.5 bp =US Treasury +12.5 bp =Libor+spread 4.56%4.31%76%.x .<year term loan)(bp=basis points)and 1 month Libor .85)morsspre .85+125bp=2.10%150 bp=4.44%3 3.065%3.76%3.41%3.065%3.76%3.41% (Rate 2}interest rate +100 bp (interest rates are rising)5.56%5.44%§.31%|4.76%4.065%4.76%)4.41%4.065%4.76%)4.41% (Rate 3)interest rate +150 bp (if project is delayed)6.06%5.94%5.81%5.26%4.565%5.26%4.91%4.565%)5.26%4.91%) (Rate 1)Projected debt service annual repayments $153,135.91 $3,805,467.00 |$3,769,956.60 |$3,731,699.52 |$3,572,305.32 $1,688,327.88 |$1,865,849.76 |$3,554,177.64 $1,688,327.88 |$1,786,152.66 |$3,474,480.54 Projected debt service total interest payment $153,135.91 $21,828,406.00 |$19,868,476.00 |$20,500,591.36 |$17,631,495.76 $7,054,901.84 |$10,250,295.68 |$17,305,197.52 $7,054,901.84 |$8,815,747.88 |$15,870,649.72Projecteddebtservicetotalrepayments$46,823,135.91 $68,498,406.00 |$66,538,476.00 |$67,170,591.36 |$64,301,495.76 $30,389,901.84 |$33,585,295.68 |$63,975,197.52 $30,389,901.84 |$32,150,747.88 |$62,540,649.72 {Rate 2)Projected debt service annual repayments $4,108,612.08 |$4,071,560.88 |$4,031,627.64 |$3,865,067.28 $1,830,101.40 |$2,015,813.82 |$3,845,915.22 $1,830,101.40 |$1,932,533.64 |$3,762,635.04 Projected debt service total interest payment $27,285,017.44 |$26,618,095.84 |$25,899,297.52 1 $22,901,211.04 $9,606,825.20 1 $12,949,648.76 |$22,556,473.96 $9,606,825.20 |$11,450,605.52 |$21,057,430.72 Projected debt service total repayments $73,955,017.44 |$73,288,095.84 |$72,569,297.52 |$69,571,211.04 $32,941,825.20}$36,284,648.76 1 $69,226,473.96 $32,941,825.20 |$34,785,605.52 |$67,727,430.72 (Rate 3)Projected debt service annual repayments $4,264,935.36 |$4,227,133.68 |$4,186,383.72 |$4,016,325.84 $1,903,475.28 |$2,093,191.86 |$3,996,667.14 $1,903,475.28 |$2,008,162.92 |$3,911,638.20 Projected debt service total interest payment $30,098,836.48 |$29,418,406.24 |$28,684,906.96 |$25,623,865.12 $10,927,555.04 |$14,342,453.48 |$25,270,008.52 $10,927,555.04 |$12,811,932.56 |$23,739,487.60 Projected debt service total repayments $76,768,836.48 |$76,088,406.24 |$75,354,906.96 |$72,293,865.12 $34,262,555.04 |$37,677,453.48 |$71,940,008.52 $34,262,555.04 |$36,146,932.56 |$70,409,487.60BattlecreekannualMWh373003730037300373003730037300373003730037300)37300 37300)37300) (Rate 1)Costs of p {|repay t/37,000 MWh)-1$4.11 $102.02 |$101.07 |$100.05 |$95.77 $95.29 $93.15 (Rate 2}Costs of power (annual repayment/37,000 MWh)$110.15 |$109.16 |$108.09 |$103.62 $103.11 $100.87 (Rate 3)Costs of power (annual repayment/37,000 MWh}$114.34 |$113.33 |$112.24]$107.68 $107.15 $104.87 Note:O&M additional costs are estimated to be about $70,000 per year (about $2 per MWh),these costs includes gages and civil work.After debt service is paid off in year 19 the cost of power would reduce to about $2 per MWh. 1 of2 Alaska Energy Authority Financing options for Battle Creek project $46.7M BPMC meeting 3/17/2017 Option 2:Issue 30 year debt with the intension to extend the FERC license and refinance over full 30 years Assumptions: 1)Debt would be issued with a call option,rates below do not include the costs associated with a call option 2)FERC license is extended prior to expiration in of current license in December 2035 Short-Term Long-Term Financing Options National Cooperative National Cooperative .50%Tax-Exempt .CoBank Construction Service Corporation Service Corporation Taxable General Tax-Exempt General 50%UsDARural |50%Taxable General)Combined RUS 50%USDA Rural General Obligation Combined RUS Funding conditions Loan (NCSC)CoBank (NCSC)Obligation Bonds Obligation Bonds Utility Service (RUS)Obligation Bonds and Bonds Utility Service (RUS)Bonds and Bonds Finance Amount ($in million)$46,670,000)$46,670,000 $46,670,000)$46,670,000)$46,670,000)$23,335,000 $23,335,000 $46,670,000 $23,335,000 $23,335,000 $46,670,000 Term (yrs)-2 years 2 years 30 years|30 years|30 years|30 years|30 years|30 years|30 years|30 years'30 years| (Rate 1)Interest rate (%)as of 3/10/17 US Treasury is 3.16%(for 30 Libor+spread=US Treasury +125 bp to US Treasury +12.5 bp =US Treasury +12.5 bp =Libor+s;id 4.1 .-..year term loan)(bp=basis points)and 1 month Libor .85)moresprea 85+12Sbp=2.10%150 bp=4.66%83%(10 yr avg)4.50%(10 yr avg)3.75%4.83%4.29%3.75%450%4.13% (Rate 2}interest rate +100 bp (interest rates are rising)5.66%5.83%5.50%4.75%5.50%5.13%4.75%5.50%5.13%) (Rate 3)Interest rate +150 bp (if project is delayed)6.16%6.33%)6.00%5.25%6.00%5.63%5.25%6.00%)5.63% (Rate 1)Projected debt service annual repayments $153,135.91 $2,891,129.88 |$2,948,499.84 |$2,837,640.36 $1,296,816.24 |$1,474,249.92 |$2,771,066.16 $1,296,816.24 |$1,418,820.18 |$2,715,636.42 Projected debt service total interest payment $153,135.91 $40,063,896.40 |$41,784,995.20 }$38,459,210.80 $15,569,487.20 |$20,892,497.60 |$36,461,984.80 $15,569,487.20 |$19,229,605.40 |$34,799,092.60Projecteddebtservicetotalrepayments$46,823,135.91 46,670,000.00 |$86,733,896.40 |$88,454,995.20 |$85,129,210.80 $38,904,487.20 |$44,227,497.60 |$83,131,984.80 $38,904,487.20 |$42,564,605.40 |$81,469,092.60 (Rate 2)Projected debt service annual repayments $3,236,292.48 |$3,296,758.68 |$3,179,845.56 |1$1,460,716.92 |$1,648,379.34 |$3,109,096.26 |1$1,460,716.92 |$1,589,922.78 |$3,050,639.70 Projected debt service total interest payment S 50,418,774.40 |$52,232,760.40 |$48,725,366.80 $20,486,507.60 |$26,116,380.20 |$46,602,887.80 $20,486,507.60 |$24,362,683.40 |$44,849,191.00Projecteddebtservicetotalrepayments46,670,000.00 |$97,088,774.40 |$98,902,760.40 |$95,395,366.80 $43,821,507.60]$49,451,380.20 |$93,272,887.80 $43,821,507.60 |$47,697,683.40 |$91,519,191.00 (Rate 3)Projected debt service annual repayments $3,415,548.00 |$3,477,454.441$3,357,722.76 $1,546,280.76 |$1,738,727.22 |$3,285,007.98 $1,546,280.76 |$1,678,861.38 |$3,225,142.14 Projected debt service total interest payment $55,796,440.00 |$57,653,633.20 |$54,061,682.80 $23,053,422.80 |$28,826,816.60 |$$1,880,239.40 $23,053,422.80 |$27,030,841.40 |$$0,084,264.20Projecteddebtservicetotalrepayments46,670,000.00 |$102,466,440.00 |$104,323,633.20 |$100,731,682.80 $46,388,422.80 |$52,161,816.60 |$98,550,239.40 $46,388,422.80 |$50,365,841.40 |$96,754,264.20BattlecreekannualMWh373003730037300)37300 37300 37300)37300)37300!37300)37300)37300)37300) (Rate 1)Costs of power (annual repayment/37,000 MWh)-4$4.11 -1$77.51 |$79.05 |$76.08 $74.29 $72.81 (Rate 2)Costs of power (annual repayment/37,000 MWh)-1$86.76 |$88.38 |$85.25 $83.35 $81.79 (Rate 3)Costs of p {|repay t/37,000 MWh)-1$91.57 |$93.23 |$90.02 $88.07 $86.46 Note:O&M additional costs are estimated to be about $70,000 per year (about $2 per MWh),these costs includes gages and civil work.After debt service is paid off in year 31 the cost of power would reduce to about $2 per MWh. 2 of2 Hf Yide? Battle Creek Update March 17,2017 Battle Creek Permitting: e Received water rights from Alaska DNR. e Revised information and figures submitted to Alaska DNR for the requested land lease amendment.They will prioritize. e Fish Habitat Plan filed with FERC. Critical Path Schedule March 17,2017:Determine changes to agreements. March 17-April 18:Utilities determine in or out.Draft revised agreements.Bradley bond payment issue. April 18 May 15,2017:Sign revised agreements.Bradley bond payment resolved. June 15,2017 Participating utilities provide funding for survey &brushing July 16,2017:Financing in place Start route survey &brushing paid for by participating utilities July 26,2017:Advertise Invitation to Bid August 16,2017:Contractor Pre-Bid Meeting August 22,2017:Site visit October 2017:Bids due Notes to Schedule: Survey &brushing enables contractors to see exact route and ground beneath alders.In addition, contractor can start 2018 roadwork in May or June so as to have a full construction season.Otherwise, migratory bird nesting window goes until July 15. Long time between advertising and bid opening enables contractors to do additional investigations of their own.The more they understand logistics the lower the bids.Seeing the site and having time to work the logistics can make a difference in bids by 10%or more. Cost: Estimated bid amount $36.7M Owner contingency $5.5M Non-Contract Costs $4.5M Total Project Costs $46.7M Financing rates appearto be increasing in the next year.A delay in financing will add significantly to cost of energy. A 1%increase in financing is nearly an increase of 10%cost of energy and about equal to a 10%increase in construction cost if the term of financing is 18 years. SMRG McDOWELL RACKNER GIBSON PC MEMORANDUM TO:BPMC FROM:Kirk Gibson DATE:March 16,2017 RE:Battle Creek Diversion Project Analysis I.INTRODUCTION At the February meeting of the Bradley Lake Hydroelectric Project. Management Committee (BPMC),|was tasked with working with Brian Bjorkquist to identify the issues that would need to be addressed by the Bradley Lake Hydroelectric Project Participants should the Battle Creek Diversion Project (Battle Creek Project)move forward with less than all the Bradley Lake Hydroelectric Project Participants.1 It is important to state at the outset that this summary memorandum cannot possibly discuss all the possibilities available to the BPMC.There are plenty of "variations on the theme'other than those presented in this memorandum.The BPMC should consider convening a workshop to address the considerable complexities involved in the identification of the costs and benefits associated with 1 The key agreements associated with Bradley Lake reviewed for this analysis,are:Alaska Energy Authority Power Revenue Bond Resolution (Bond);Agreement for the Sale and Purchase of Electric Power (PSA);and Bradley Lake Project Management Committee Bylaws (Bylaws).For purposes of this memorandum,the Bradley Lake Hydroelectric Project Participants will be referred to as "Bradley Participants”and those Bradley Participants involved in the Battle Creek Project will be referred to as "Battle Creek Participants.” main:503 595 3922 |fax:503 595 3928 |www.mrg-law.com 419 SW 11th Ave,Suite 400 |Portland,Oregon 97205-2605 March 16,2017 the Battle Creek Project and the associate allocation of water that will be used forpowerproduction.2 ll.BACKGROUND The Bradley Lake Hydroelectric Project (Bradley Lake Project)3 is owned by the State of Alaska and administered by the Alaska Energy Authority (AEA).The Battle Creek Project involves the diversion of water into the reservoir which holds the water supply for Bradley Lake Project.The Bradley Lake Project would generateenergyfortheBattleCreekParticipantsusingthedivértedwaterresourcesprovidedbytheBattleCreekProject.One of the conditions:'of the Bond,which is relevant tothedevelopmentofBattleCreekProject,requires that the Bradley Lake Project ownorholdrightsintoperpetuitytothelandswhichencompasstheproject.eThenumberandidentificationof:the Battle Creek Participants are unknownasofthisdate;however,it is highly probable that the utilitiesParticipating in theBattleCreekProjectwillbeasubsetoftheRadleyPantcipants.NSm=SHORT ANSWER'es The Battle Creek Project,'can.be,develosed:by a subset of the BradleyParticipants.An effort such as the'BattleCreek Project.(with less than all of theBradleyParticipants.involved)was not specifically contemplated when the Bond andPSAweredrafted"and executed,but:dt appears that there is a process in place tomanagesuchopportunities\The Battle Créek Project could be handled as "OptionalProjectWork”under the PSA jbecause the Battle Creek Projectis an improvement totheBradleyLakeProject.There:are,however,many complexities (contractual andoperational)that will need to,be-resolvedod ee not all Bradley Participants aretakingpartiinsuch.work.NS ;"The genesisDy most of the issues that need to be addressed emanate fromtheBradley.Participants''obligations under the Bond.Indeed,the handling ofRevenues'that are generated by the Bradley Lake Project and which are attributabletothediversionsfromtheBattleCreekProjectwillneedtobeaddressed,and thecurrentoperationalpracticeswillneedtobereconsideredgiventheservicesinvolvedwiththe'generation of energy for the Battle Creek Project.Many of thecomplexitiesaresignificantlydiminishedoreliminatedaftertheBondobligationsareextinguished.4 2 This type of review would be valuable given the BPMC Bylaw voting requirement to obtain a "super majority'on any BPMC decisions involving Optional Project Work.The voting requirements are discussed later in this analysis. 3 The Bond and the PSA reference the Bradley Lake Hydroelectric Project as the "Project.”Thus,all references to language used in the Bond and the PSA will use the term "Project.” 4 The current Bonds are currently expected to be retired on or about July 1,2020,or at the latest July 1,2021.Any refinancing after the Bonds are extinguished may result in terms and conditions different from those contained in the existing Bond. March 16,2017 IV.ANALYSIS The issue of a Project-enhancement opportunity without the full participation of the Bradley Participants was not specifically contemplated when the Bond and PSA were drafted and executed by the Bradley Participants.The Optional Project Work provisions can be put in place for the BPMC to consider and manage such circumstances.The work that will be necessary to merge the Battle Creek Project with the Bradley Lake Project operations is the responsibility of the BPMC.sAfteridentifyingthepaththattheBPMCcoulduseundertheBondand PSAe,this memorandum will address the areas where the BPMC must use care in craftingasolutionforaccommodatingtheBattleCreek.Project.with less than all the BradleyParticipants.Ultimately,the BPMC will need to tindertake a comprehensive review oftheday-to-day and season-to-season operational aspects of the Bradley LakeProjectsothattheBattleCreekProject'and the Bradley Lake Project can both be used efficiently.NO .No Battle Creek Project can be Undertaken as Optional Project Work .- om .The Battle Creek Project'can be charactenzed and managed as "OptionalProjectWork”by the BPMCin accordance with Sections 1(t),4(d),and 13(c)(ii)(G)ofthePSA.7 Optional Project Work must be approved by the BPMC.The PSAprovidesthatanyOptionalProjectWorkshallbeattheexpenseofthebenefittedBradleyParticipant(s)as determined in advance by the BPMC,considering the valueoftheproportionalbenefitconferreduponeachBradleyParticipant.Most important,there must be no adverse impact to the Bradley Lake Project,and if thereis,thebenefittedBradleyParticipantsmustcompensatetheotheradverselyaffectedBradleyParticipantsfforanyincreasedcostsandreducedbenefitsresultingfromsuchimpact.8 SN.;SL "Under the BPMC Bylaws;the authorization of Optional Project Work and theallocation'off compensation and/or costs attributable to the Optional Project WorkrequiresasupermajorityvoteoftheBPMC,which consists of at least fourrepresentativesoftheBradleyParticipantswhosepercentagesharesofthe Bradley an N ' aS s See generally "Optional Project Work'at Section 13(c)(ii)of the PSA and specifically Section Nos. 13(c)(ii)(A),(B),(D)and (G). 6 The BPMC can use Optional Project Work to accomplish the incorporation of Battle Creek Project with Bradley Lake Project. 7 Optional Project Work is defined in the PSA as repairs,renewals,and replacements,improvements, betterments,additions,or expansions that do not constitute Required Project Work.The Battle Creek Project is not Required Project Work. 8 If there is disagreement about any adverse impacts or appropriate compensation,the disputing utilities must submit the issue to dispute resolution in accordance with the procedures adopted by the BPMC pursuant to PSA section 13. March 16,2017 Lake Project capacity are greater than 51 percent,plus the affirmative vote of the Authority.9 Optional Project Work Provisions BPMC must adopt provisions to evaluate and approve Optional Project Work and determine whether any compensation need be paid by those Bradley Participants benefitted by the Optional Project Work.Such provisions can be developed in several ways;ranging from publishing rules to guide the BPMC in allsimilarsituationstoanalyzingtheissuesonasase-by-case basis.Given thatopportunitiesliketheBattleCreekprojectarerare?it would be more efficient for theBPMCtoanalyzetheissuesassociatedwithateCreekProjectusingacase-specific analysis. The controlling issues that the"BPMC would need.to consider in anyprovisionsgoverningtheevaluationand.approval of Optional Project Work are theBondprovisionsgoverningrevenuesreceivedfrom,.,the Bradley.Lake Projectoperations.re on 2s e Revenues-All revenuesreceived under.the PSA or any other contract forthesaleofpower,energy,transmission,or.other service from the Project(or any part thereof),or 'any contractual arrangement with respect to theuseofthe'Project (or any 'portion thereof),or the services output capacitymustbe'paid into the Revenue Fund.10 NoSeItfollowsthattherevenuegeneratedfromanygeneration tolling-type services11 by provisions.'The BPMC may,need t to'consider the use of a special mechanism fortrackingrevenues,etc,attributable to theBattle Creek Project.Thus,any potentialarrangementconsideredbythe.-BPMC to accommodate the Battle Creek Projectwouldneedtoaddressthetreatmentofrevenuesgenerated.The next level of issues which the BPMC must address as part of itsresponsibilityover.Qptional |Project Work,are:e Annual Payment Obligations -The BPMC has the authority to establish the estimated Annual Payment Obligation for each Bradley Participant. The estimated Annual Payment Obligation and the resulting individual monthly payments required of Bradley Participants will need to be used to allocate the costs and benefits associated with the Battle Creek Project to 9 See Section 5.10.5(12)of the Bylaws.The BPMC is to adopt provisions for evaluating and approving Optional Project Work in accordance with Section 13(c)(ii)(G)of the PSA. 10 See Section 101,"Revenues.”The Revenue Fund is created under Section 502 of the Bond. 11 An example of tolling service would be an arrangement under which the Battle Creek Participants enter into an agreement providing the terms and conditions under which the Bradley Lake Project use water supplied by the Battle Creek Project to generate energy for the Battle Creek Participants. March 16,2017 those Bradley Participants participating in the Battle Creek Project.This area of oversight will more than likely need to be used by the BPMC to manage the allocation of costs and benefits associated with bringing on the Battle Creek Project and dealing with any cost/benefit inequities by and between the Bradley Participants. e Water Allocation -The BPMC has the authority to establish procedures for the use of each Bradley Participant's Water Allocation.These allocations must delineate the scheduling and priority of the generation at the Bradley Lake Project to account for and manage the flows entering theBradleyLakereservoirfromtheBattle|Creek Project.The BPMC will needtoalsoaddress,among other matters,--the manner which inflows fromBattleCreekProjectwillbemeasured,how the evaporation levels of thoseamountswillbedetermined,and the scheduling «of the respective waterresourceflowsthroughthe'Bradley Lake Project.generators.Thecharacterofthewaterthatisspilledfromtimetotimewillalsoneedtobeconsideredandamethodologyforidentifyirigthesourceofthewaterthatisspilledwillneedto:be determined,The water-related issues should bediscussedearlyinto'the process to ascertain whether thereis an ability tocometoanagreementby'and between the Bradley Lake Participants.e Financing-Most typical 'asset-based financing will involve the borrowersprovidingfinancialassurances,oftén directly attached to the asset.TheStateofAlaskawillowntheassefastheBattleCreekProjectispartoftheBradleyLakeProject.The Battle Creek Participants will need to arrangeforfinancing-that/can:(i)use the provisions of the existing Bond_ Resolution foriinciirring additional debt;(ii)be subordinated to the existingBond;or (iii)use.balance :sheet financing by the utilities participating in the'Battle Creek Project.The BPMC will need to review any financingalternativesandconsider(both individually and jointly)each of the BradleyRarticipantsobligationsundertheBond.°Changes to Capacity Share -The BPMC may want to consider whetheradditionalcapacityassociatedwithBattleCreekmaychangepercentagesharesofcapacityiintheBradleyLakeProject,and accordingly,the votingparameters.for Bradley Participants.The BPMC may also want toconsidertheresponsibilitiesofBPMCmembers,and how the responsibilities may change or are carried out (if at all). There are many aspects of the current Bradley Lake Project operations that will need to be addressed to facilitate the Battle Creek Project and accommodate the flows and resulting generation therefrom.Not all are identified in this summary memorandum.It is clear from reviewing the issues associated with the development of the Battle Creek Project that each area of Bradley Lake Project operations that needs to be addressed becomes a multi-faceted issue when the number of Battle Creek Project Participants is a subset of the Bradley Lake Project Participants.The attached exhibit listing the provisions in the Bond and PSA that need to be March 16,2017 considered is provided as a guide for the work that the BPMC will need to perform to accommodate the Battle Creek Project. Possible Alternative Arrangements The State will more than likely want to own the new asset (i.e.,the Battle Creek Project)and all the issues involved with water allocation and operating protocols will need to be resolved by the BPMC.Any actions taken by the BPMC with respect to the Battle Creek Project will require a'Super majority of the BPMCplusAEA's affirmative vote is needed to approve,the BPMC's actions relating toOptionalProjectWorkunderthevotingrequirémentssetforthintheBPMCBylaws.12 There several representative waysinwhich the Bradley Lake Project may beabletoaccommodatethedevelopment"and operation of the Battle Creek Projectwithlessthanthefullparticipationof.the Bradley Participants...The method offinancingfortheBattleCreekProjectisvery.important;however,the keystone forsuccesswillbethemannerwhichtheBPMC_resolves the operational issues.TheBPMC's work on operational (matters will be "driven,in large part,by the type offinancingusedbytheBattleCreekParticipants.The BPMC will need to address theOptionalProjectWorkprovisions,,the identification and allocation of thecosts/benefits of the financing arrangement.chosen by the Battle Creek ParticipantsandBPMC,irrespective of the choice of financing..SoeIssuing:Additional Bonds -The.Bond coniains provisions which providethatadditionalBondscanbeissuedforadditionsorexpansionsapprovedby:the BPMC as _Optional Project Work.13 There may also be an ._opportunity tohave.a "springing”Bond directly after the Bonds are retired.Co In terms of financing,this path of using bond financing may be the easiest"s.but does resultin the,Bradley Participants that are opting-out of the Battle".Creek Project.being "responsible for the debt in some capacity.Thatresponsibilitycanbeaddressedintheallocationofcosts/benefits duringtheevaluationandapprovaloftheOptionalProjectWork.There appearstobenoneedto,'enter a tolling arrangement under this approach becausetheBattle'Creek Project will become part of the entire Bradley LakeProject.The "challenge for the BPMC involves the assessment andallocationof-cost and fees of the financing and the associated risk (because not all parties would be liable for the repayment of funds).Under this scenario,the cost of financing would likely be borne by the Battle Creek Participants through adjustments to the Annual Payment Obligation. va 12 Section 5.10.5.12 requires the affirmative vote of at least four representatives of the Purchasers (Bradley Participants),whose percentage shares of Project capacity are greater than 51 %plus the affirmative vote of the representative of the AEA.The current percentage of Bradley Lake Project capacity held by each Bradley Participant is:Chugach (30.4%);ML&P (25.9);GVEA (16.9%);HEA (12.0%);MEA (13.8%);Seward (1.0%). 13 See Section 101 "Capital Improvements”and Section 201. March 16,2017 e Private Financing -|can find no restriction in the Bond preventing the Battle Creek Participants from privately financing the Optional Project Work.There are some benefits that can be garnered using private financing because the complexity involved in allocation of costs and risks become less.It bears repeating that so long as the existing Bond is in existence,the Bradley Lake Project will need to own or have rights into perpetuity on the Battle Creek Project lands.The issue that must be addressed with respect to the viability of using private financing is thepotentialneedfortheBattleCreekParticipantstoprovidefinancialassurancestothecreditor(s).The assurances that may be required couldbeanissuethattheBPMCwillneedto'address.This method of financinginnowaylessenstheneedtoaddress'the complexity of the otherOptionalProjectWorkprovisions,Some form of tolling arrangement wouldmorethanlikelybeneededundeérthisscenario.N€7 aeRestrictionsforBradleyParticipantsMeaeyeZL.The Bond and PSA place certain restrictions on the actions:that a BradleyParticipantscantake.Bradley'Participants are restricted from entering agreementsthatmayjeopardizetheirabilitytopayforpowerreceivedunderthePSA.A BradleyLakePurchasermaynotenteranycontractoragreementtotakeortotakeorpayforpower,payable from the Purchaser's System on a 'parity with or superior to thePurchaser's obligations under the PSA,except Purchaser may enter a contract thatisatparityforalimiteddurationofnottoexceedtwo.years.These restrictions canbeavoided,however,if a consultant renders an Opinion that:(1)the contract isreasonablyexpected.to contribute to Purchaser's System in an efficient andeconomicalmannerconsisténtwithPrudentUtilityPractice,and (2)the contract willnotimpairtheabilityofPurchasertotaiserevenuestomeetitsobligationsunderthePSA.14 These restrictions must be considered by each Bradley Participant and theBPMCastheBattleCreekProjectiisevaluatedandthecosts/benefits are allocated.However,based on my understanding of the Battle Creek Project,none of therestrictions.should pose 'aé problem with the Battle Creek Project as currentlyplanned._} "Vv.CONCLUSION The Battle Creek Project can be characterized and managed as Optional Project Work by the BPMC in accordance with Sections 1(t),4(d),and 13(c)(ii)(G)of the PSA.It is the responsibility of the BPMC to adopt provisions to evaluate and approve Optional Project Work and determine whether any compensation need be paid by those Bradley Participants benefitted by the Optional Project Work.The controlling issues that the BPMC will need to consider in any provisions governing the evaluation and approval of Optional Project Work are the Bond provisions governing revenues received from the Bradley Lake Project operations.In addition, 14 See Section 10(d)of the PSA. March 16,2017 there are many aspects of the current Bradley Lake Project operations that will need to be identified and resolved by the BPMC to facilitate the Battle Creek Project and accommodate the flows and resulting generation therefrom.The fact is that while the arrangement can be accommodated under the Bond and PSA,the devil will truly be in the details;especially with the need to meet a "super majority”on the BPMC decisions concerning Optimal Project Work. "aa :4 aé 7CoNAo,,"OS "RePAi.- RS ', ".N N a -a \a /ea a"os 4 :So f .a aa sCoNNS=\e arnryapoe,NA Re NS f ",*,vey % sa -;as te &Ke 2 Me Ne SS %YoNs ' , an 7 Se"a é .7 "4 . No Bradley Lake Operator Report Bradley Project Management Committee March 16,201°7 Unit Statistics:as of 02/28/2017 Generation Unit 1 (MWhrs)Unit 2 (MWhrs)Total (MWhrs) February 2017 20,766 13,739 34,505 Hydraulics Avg.Lake Level (ft)Usage (ac ft)Fishwater (ac ft) February 2017 1,156 36,684 2,351 Lake Level -1,127 (Feb 28)Unit Availability 100%(February) Operations,Maintenance,and Inspections: 1) 2) 3) 4) 5) 6) 7) 8) 9) Earthquake Occurrence-We had an earthquake occurrence March 1 that was significant enough to warrant a dam inspection.No damage was found. Kenai Islanding -due to transmission work the Kenai is islanded and will be sountilapproximatelyApril15". Due to Islanding -Bradley is in a single unit operation and we are completing annual maintenance work on the unit that is off line.We will swap units and perform the maintenance on the other unit starting next week. During the swap of units -We are intending on making the previously approved tap changes to the transformers.This should eliminate an additional Bradley outage to the northern utilities. Bradley Unit #2 nozzle seal -There is basically no change to the status of the nozzle oil leak.The leak continues to be minor Unit #2 Accusonic flow meter -Unit #2,flow meter continues to have issues. Additional parts are on order staff has a work around so readings will not be lost. Marker Ball Replacement -Northern Power Lines Constructors is the successful bidder.We are working with them to establish a schedule. Weather -Has been a mix of clear and cold and bouts of heavy snow on the lower elevations.Not a lot of snow at the dam was observed when we did the earthquake inspection on the 1*of March. Safety Meeting -The ERP will be presented and discussed on March 20. Bradley Lake Operator Report Page 1 Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 Wage" STATUS:Active Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY (AEA) Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Friday,March 17,2017 at 9:00 a.m.For additional information contact Teri Webster at 907-771-3074. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Board Conference Room,813 West Northern Lights Boulevard,Anchorage,Alaska; A teleconference line has been set up for those unable to attend in person.Dial 1-888-585-9008,Enter Code 467-050-1264. The public is invited to attend.The State of Alaska (AEA)complies with Title Il of the Americans with Disabilities Act of 1990.Disabled persons requiring special modifications to participate should contact AEA staff at 907- 771-3074 to make arrangements. Attachments,History,Details Attachments Details BPMC Agenda 3-17.pdf Commerce,Community andDepartment:Economic Development Revision History Category:Public Notices Created 3/10/2017 9:19:53 AM by Sub-Category: tawebster Location(s):Statewide Modified 3/10/2017 9:20:26 AM by [Details]Project/Regulation #: tawebster Modified 3/13/2017 3:07:26 PM by [Details]Publish Date:3/10/2017 tawebster Archive Date:3/18/2017 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=184940 3/13/2017 Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 ¥ vi * STATUS:Active Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY (AEA) Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Friday,March 17,2017 at 9:00 a.m.For additional information contact Teri Webster at 907-771-3074. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Board Conference Room,813 West Northern Lights Boulevard,Anchorage,Alaska; A teleconference line has been set up for those unable to attend in person.Dial 1-888-585-9008,Enter Code 467-050-126#. The public is invited to attend.The State of Alaska (AEA)complies with Title Il of the Americans with Disabilities Act of 1990.Disabled persons requiring special modifications to participate should contact AEA staff at 907- 771-3074 to make arrangements. Attachments,History,Details Attachments Details None Department: Revision History Category: Created 3/10/2017 9:19:53 AM by aoe aeooytawebsterion(s): Modified 3/10/2017 9:20:26 AM by [Details]Project/Regulation #: tawebster Publish Date: Archive Date: Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=184940 Commerce,Community and Economic Development Public Notices Statewide 3/10/2017 3/18/2017 3/10/2017 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING tg AGENDAFriday,March 17,2017 9 a.m. Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate,dial 1-888-585-9008 and use code 467 050 126. 1.CALLTO ORDER 2.ROLL CALL FOR COMMITTEE MEMBERS 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.AGENDA APPROVAL 6.APPROVAL OF PRIOR MINUTES -Feb 17,2017 7.OLD BUSINESS A.FY18 Bradley Budget Budget Committee B.Disposal of Bradley Assets AEA C.Battle Creek project financing AEA ;ore,Be bpcator procurement AEA 2 a8.COMMITTEE REPORTS opposes Heh/nen 9g.OPERATOR REPORT 10.COMMITTEE ASSIGNMENTS 11.MEMBERS COMMENTS 12.NEXT MEETING DATE -April 18,2017 13.ADJOURNMENT Th Budge 4M irene vod Wee B4BOK spread crf in yrs.O£D Dodd lool £at it OGF OLD Newaterance hyn D+<Gu ip 'S high.No obyrhins to <xpend.eer.2gBurleesupprttw,A purchasedSameHime,now repkee sametime,Con bspmiad ad un ieBrod-deseveoiin m Bt.They wae revved if soley fr B,Meaked for BL.Remaled Qesmpie ,y-mebenehti-Be,Craye ketchen Cans tle leased ve purchoced?Yes,Many ophos Wa Dbl.ee Tony-Fin SVC wo]Bat 1 Caeonry In 7 Yoo [ateto Finance VC,Completed Tely 207,Baqleotapie.leted Sradl Ne Ove FYI8 w|Budget ws]uw franILLseond Caotet non pad Br financ oo .re Spread otFORSVCEnonBACforwhatappropRiakefi,Fanon uns ,SepWway 3-4M .TE apitlway Cae,SS-L"LSM.Berehy 27-281 REAL A,strace Z50b Mwh each yr a=Mt Mia -spikw (2San n bu ae 'one wh |Sted ppne copra.ine Appl all 98 eeperditiros TR Soselyn -went thr Procese,TC.-BC fin.-Lee DeeBL2OBS-Oyrerelicensing Shaft 2029 br Mary.Ge deter mnatiydterhorncracNsWadeshimrakiclott2H.Win oat yr Bupdote fA'weak raiee Anti?6h eek utencot.sForttert shgkt pact.CongAoreYoubeneGtCYLODVIS.Grad -Lowest Cost renewal Fesourcek..Good dead, mol ECO Fin OVO ELT Fin C&D Cire Financrg 7 Bartle,Creek.Membeno tomoMUlookatst*LT Long tert both dine lownr cat tneaylOL2e a ATTENDANCE -BPMC REGULAR MEETING,Mar 17 @ 9:00 am _. ||COMMITTEE MEMBERS | ALTERNATE 'Cory Borgeson,Chair 'GVEA |_Lyan-Fhompserr ft Lee Thibert,Vice Chair CEA |hot?Burke Wick i a Brad Janorschke HEA |Bob Day Michael Lamb,Secretary/Treasurer AEA S|Bryan Carey '|Tony Izzo |MEA /|Gary Kuhn _ Mark Johnston |MLP /|Jeff Warner / |JohaFoutz | |SEW "deffEstes Public Members a ||COUNSEL |David-tockard Kirk Gibson,McDowell Rackner &Gibson PC |Kirk Warren Brian Bjorkquist,Dept of Law |Briar Hickey {GEA P|San Lange,ECA Mark Johnson{CEA)4 Zo nr O}S.- /.Crystal Enkvist (APA) Mel Hutchinson (APA) Rich Baldwin (HEA) Anna Henderson (MLP) Alan Owens (HEA)e /Bernie Smith (RCA) +------_$Phoe Emily Hutchinson (HEA):Jim Brooks (MEA) /,Gary Kuhn (MEA) 4.01 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Y First Second First Second First Second First Second BPMC 3/17/17 Ae¥|"for Roll Cail Agenda Minutes Bradley Budget Battle creek financingRollcallfromtoptobottomendingwithChair Yes No Yes No Yes No Yes No Yes No Homer Electric Association Prd WA 7 all 0 Matanuska Electric Association Toms "MY \?\Y City of Seward O\locent Blpsent -a Alaska Energy Authority """ Municipal Light &Power Jet ft """ Chugach Electric Association CRAY {ee WA WA WA Golden Valley Electric Association foc ¥WA WA WA First Second First Second First Second First Second First Second O&M operator Roll call from top to bottom ending with Chair procurement Yes No Yes No Yes No Yes No Yes No Homer Electric Association Matanuska Electric Association City of Seward Alaska Energy Authority Municipal Light &Power Chugach Electric Association Golden Valley Electric Association Next Meeting:Tuesday,April 18 Bradley Lake Project Management Committee Friday,Mar.17 @ 9:00 am. **PLEASE WRITE LEGIBLY** NAME ORGANIZATION Same SZ.iCH Kenan Lu re.REFOoKeywuWApert Lacey Slorqensen HE /.- aS colua (sucnec eA Gly VAY ER ere Worn AzA Cryslat Enkvist APA Daniel Herrin RéEn Ter:odbete RAZA SUG ADIN VOW.ACU -Type Qeore.Voy Vang BLOX Bon WelSh av2R Zn Wh urechingon Wer Holly Worcesan Wel